Asked by Krystal Phengsomphone on Jun 09, 2024
Verified
Which of the following is the correct formula for the revenue volume variance?
A) Planned Revenues - Actual Revenues
B) (Planned Selling Price per Unit - Actual Selling Price per Unit) × Actual Units Sold
C) (Planned Units Sold - Actual Units Sold) × Actual Sales Price
D) (Planned Units Sold - Actual Units Sold) × Planned Sales Price
Revenue Volume Variance
This reflects the difference between actual revenue and the expected revenue that was based on the budget, often attributed to changes in sales volume.
Planned Selling Price Sep## Actual Units Sold
This represents the comparison between the pre-established price at which goods were intended to be sold and the actual number of units sold.
- Compute and assess the differences in revenue volume and price variances along with their effects on overall revenue.
Verified Answer
LS
Lauren SeffensJun 12, 2024
Final Answer :
D
Explanation :
The revenue volume variance is calculated by comparing the difference in the number of units sold against what was planned, multiplied by the planned sales price per unit. This variance helps in understanding the impact of the difference in the volume of sales from the planned volume, without considering changes in the selling price. Option D, "(Planned Units Sold - Actual Units Sold) × Planned Sales Price," correctly represents this calculation.
Learning Objectives
- Compute and assess the differences in revenue volume and price variances along with their effects on overall revenue.
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