QUESTION 6

ACME Auto Sales is reviewing its sales for the past year. Competition forced prices down from an expected average sales price of $32,000 per vehicle to an average of only $28,000. However, sales overall picked up from a planned sales volume of 400 vehicles to an actual volume of 450 vehicles sold.

Required

a) Calculate the Sales Volume Variance. Show all work and state if the variance is favourable or unfavourable.

b) Calculate the Sales Price Variance. Show all work and state if the variance is favourable or unfavourable.