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Actual sales volume for a period is 5,000 units. Budgeted sales volume is 4,500. Actual selling price per unit is $15 and budgeted price per unit is $15.75. The sales price variance is $.

Question

Actual sales volume for a period is 5,000 units. Budgeted sales volume is 4,500. Actual selling price per unit is 15andbudgetedpriceperunitis15 and budgeted price per unit is 15.75. The sales price variance is $.

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Solution

The sales price variance is calculated as the difference between the actual selling price and the budgeted price, multiplied by the actual volume of sales.

Here's the step-by-step calculation:

  1. Find the difference between the actual selling price and the budgeted price. In this case, it's 1515 - 15.75 = -$0.75. The negative sign indicates that the actual selling price is lower than the budgeted price.

  2. Multiply this difference by the actual sales volume. So, -0.755,000=0.75 * 5,000 = -3,750.

So, the sales price variance is -$3,750. This is a negative variance, which indicates that the actual revenue is lower than the budgeted revenue due to the selling price being lower than planned.

This problem has been solved

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