Farad. Inc., specializes in selling used SUVs. During the month, the dealership sold 50 trucks at an average price of $9,000 each. The budget for the month was to sell 45 trucks at an average price of $9,500 each. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Compute the dealership's sales price variance and sales volume variance for the month.

Question

Nathalia Tanner

Business

14 July, 14:02

Farad. Inc., specializes in selling used SUVs. During the month, the dealership sold 50 trucks at an average price of $9,000 each. The budget for the month was to sell 45 trucks at an average price of $9,500 each. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Compute the dealership's sales price variance and sales volume variance for the month.

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Answers (1)

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Rubi Barton · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

The dealership sold 50 trucks at an average price of $9,000 each. The budget for the month was to sell 45 trucks at an average price of $9,500 each.

Sales price variance = (standard price - actual price) * actual quantity

Sales price variance = (9,000 - 9,500) * 50 = 25,000 favorable

Sales quantity variance = (standard quantity - actual quantity) * standard price

Sales quantity variance = (50 - 45) * 9,000 = 45,000 unfavorable