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21 May, 10:14

In a recent year, BMW sold 217,044 of its 1 Series cars. Assume the company expected to sell 226,244 of these cars during the year. Also assume the budgeted sales price for each car was $26,000, and the actual sales price for each car was $26,300.

AQ - Actual Quantity

SQ - Standard Quantity

AP - Actual Price

SP - Standard Price

Compute the sales price variance and the sales volume variance.

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Answers (2)
  1. 21 May, 11:05
    0
    The answers are:

    + Sales price variance: $65,113,200

    + Sales volume variance: $ (239,200,000)

    Explanation:

    We have detailed calculations shown as below:

    Sales price variance = (Actual unit sales price - budgeted unit sales price) x actual unit sold = (26,300 - 26,000) x 217,044 = $65,113,200;

    Sales volume variance = (Actual unit sold - Budgeted unit sold) x budgeted unit sales price = (217,044 - 226,244) x 26,000 = $ (239,200,000).

    So, for BMW recent year, we have:

    + Sales price variance: $65,113,200;

    + Sales volume variance: $ (239,200,000).
  2. 21 May, 12:37
    0
    Sales Price variance

    $65,113,200

    Sales Volume Variance

    $239,200,000

    Explanation:

    sales price variance formula

    (Actual Price - Standard Price) x Actual Units Sold

    (26,300 - 26000) x 217,044

    =$65,113,200 (Favourable)

    Sales Volume Variance formula

    (Actual Units Sold - Budgeted Units Sales) x Budgeted Selling Price.

    (217,044 - 226,244) x $26000

    = $239200000 (unfavorable)
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