Multiple Choice
A(n) ________ is the variable amount in a salesperson's compensation.
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4. Merchandising Operations
Net Sales
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Which of the following may cause a favorable sales volume variance of the revenues?
A
Actual selling price is lower than the budgeted selling price
B
Budgeted sales returns are higher than actual sales returns
C
Actual units sold exceed the budgeted units sold
D
Actual units sold are less than the budgeted units sold
Verified step by step guidance1
Understand the concept of sales volume variance: Sales volume variance measures the difference between the actual number of units sold and the budgeted number of units sold, multiplied by the budgeted selling price per unit.
Analyze the options provided: Each option describes a potential factor that could influence sales volume variance. Focus on the relationship between actual and budgeted units sold, as this directly impacts the variance.
Option 1: 'Actual selling price is lower than the budgeted selling price' - This affects price variance, not sales volume variance, so it is not relevant to the question.
Option 2: 'Budgeted sales returns are higher than actual sales returns' - Lower actual sales returns could improve net sales, but this does not directly cause a favorable sales volume variance.
Option 3: 'Actual units sold exceed the budgeted units sold' - This directly causes a favorable sales volume variance because more units were sold than expected, increasing revenue. Option 4 ('Actual units sold are less than the budgeted units sold') would cause an unfavorable variance.
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