Comp wiz sells computers. during may 2017, it sold 350 computers at a $1,200 average price each. the may 2017 fixed budget included sales of 365 computers at an average price of $1,100 each.

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Comp Wiz sells computers. During May 2017, it sold 350 computers at a $1,200 average price each. The May 2017 fixed budget included sales of 365 computers at an average price of $1,100 each. AQ- Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price (1) Compute the sales price variance and the sales volume variance for May 2017 Flexibl AQ . Assuming the budgeted cost per unit under absorption costing system is $500

Sales Price Variance = $35,000 F

Sales volume variance = $9000 A

Explanation:

Sales Price Variance(SPV)= (Actual selling price-Budgeted selling price)Actual sales volume.

SPV = ($1200-$1100)350

       =$35,000 F (Favorable Variance)

Sales Volume Variance(SVV )=(Actual units sold-budgeted sales unit) standard profit

Standard Profit(SP) = $1100-$500

                               =$600

Hence, SVV= (350-365)$600

                    =$9000 A (Adverse Variance)

If you are asked to compute Total profit Variance (TPV), here it is below;

TPV = $35,000-$9000

      = $26,000

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