The sales volume variance for revenue is calculated by taking the difference in actual sales volume compared to the budgeted sales volume and multiplying it by the budgeted sales price per unit. \[ \text{Sales Volume Variance for Revenue} = (\text{Actual Volume} - \text{Budgeted Volume}) \times \text{Budgeted Sales Price} \] Given the data: - Budgeted Sales Volume: 1,100 units - Actual Sales Volume: 995 units - Budgeted Sales Price: $70.00 per unit Let's calculate it: \[ = (995 \text{ units} - 1,100 \text{ units}) \times \$70.00 \] \[ = (-105 \text{ units}) \times \$70.00 \] \[ = -\$7,350 \] Since the actual sales volume is less than the budgeted sales volume, the variance is unfavorable (U). Therefore, the sales volume variance for revenue is $7,350 unfavorable. The correct answer is A. $7,350 U.
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The calculation for the sales volume variance for revenue is correct. The sales volume variance for revenue is indeed calculated by taking the difference between the actual volume and the budgeted volume, then multiplying it by the budgeted price per unit. Following through with the numbers provided you get:
\[ = (995 \text{ units} - 1,100 \text{ units}) \times \$70.00 \] \[ = (-105 \text{ units}) \times \$70.00 \] \[ = -\$7,350 \]
Since the sales volume variance is negative, this indicates an unfavorable variance, because the actual volume sold was less than what was budgeted. Hence, the correct answer to the sales volume variance for revenue, given the data, is indeed $7,350 unfavorable.