Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best represents the general model for calculating a quantity variance in the context of net sales?

(Actual Quantity Sold - Budgeted Quantity Sold) × Standard Selling Price

Actual Quantity Sold × (Actual Price - Standard Price)

Standard Quantity Allowed × (Standard Price - Actual Price)

(Actual Sales Revenue - Net Sales Revenue) × Standard Price

Previous problemNext problem

Verified step by step guidance

Understand the context: A quantity variance in the context of net sales measures the difference between the actual quantity sold and the budgeted quantity sold, multiplied by the standard selling price. This helps assess how much of the variance in sales revenue is due to differences in quantity sold.

Identify the formula components: The formula for quantity variance is (Actual Quantity Sold - Budgeted Quantity Sold) × Standard Selling Price. Here, 'Actual Quantity Sold' refers to the actual number of units sold, 'Budgeted Quantity Sold' refers to the planned or expected number of units to be sold, and 'Standard Selling Price' is the price per unit that was planned or expected.

Compare the options: Evaluate each option provided in the problem. The correct formula should focus on the difference in quantities (actual vs. budgeted) and multiply it by the standard selling price. Eliminate options that involve price variances or other unrelated calculations.

Match the correct formula: The correct option is (Actual Quantity Sold - Budgeted Quantity Sold) × Standard Selling Price, as it directly calculates the quantity variance in the context of net sales.

Conclude: The other options provided in the problem involve price variances or unrelated calculations, which do not align with the definition of a quantity variance in this context.