Accounting Multiple Choice Question – 17 November 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The following information is available for the sale of Product X for June 2016.

Table 14

What is the sales price variance for June 2016?

Select ONE answer:

  1. £4,300 adverse
  2. £4,300 favourable
  3. £5,200 adverse
  4. £5,200 favourable
  5. £6,500 adverse

Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 1 – Actual sales revenue divided by actual units sold of 8.600 gives us an average sales price of £25,50, which is 50p less than the standard selling price of £26. The sales price variance, therefore, equals £0.50 * 8,600 or £4,300 which is adverse as the actual sales price achieved of £25.50 is 50p lower than the standard price set in the budget for the month.

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