The Beanny Company had budgeted sales of 1,000 units with a per unit selling price of $5 per unit. Actual sales were 1,100 units at a selling price of $4.75. What is its sales volume variance?

 Standard costs are preset costs for a product under _____ conditions.
 
multiple choice
normal Correct
perfect
abnormal
ideal

Explanation
Knowledge Check 01
 
Standard costs are preset costs for a product under normal conditions. These costs are established with the help of personnel, engineering, and accounting studies using past experiences.

 To make a cake, one pound of dry cake mix is needed. However, when pouring cake mix into the mixing bowl, 10% spills onto the floor and is unusable. What is the standard amount of cake mix necessary to make a cake?
 
multiple choice
1.11 pounds
1.20 pounds
0.10 pounds
1.10 pounds Correct
Explanation
Knowledge Check 01
 
Allowance for loss = 1.0 pound × 10% = 0.1 pound. Standard quantity (practical standard) = Ideal quantity of 1 pound + Allowance for loss of 0.1 pound = 1.1 pounds.

 

The Beanny Company had budgeted sales of 1,000 units with a per unit selling price of $5 per unit. Actual sales were 1,100 units at a selling price of $4.75. What is its sales volume variance?
 
multiple choice
$475 Favorable
$500 Unfavorable
$500 Favorable Correct
$475 Unfavorable

Explanation
Knowledge Check 01
 
Sales volume variance = (Actual units sold of 1,100 − Budgeted units sold of 1,000) × Selling price of $5 per unit = $500 favorable. The variance is favorable because the actual units sold exceeded budgeted units sold.

Thanks