Question

    In an organization, the actual sales were ₹10 lakh

    while the budgeted sales were ₹12 lakh. The cost was ₹6 lakh vs budgeted cost of ₹7 lakh. What is the sales volume variance?
    A ₹2 lakh (A) Correct Answer Incorrect Answer
    B ₹1 lakh (A) Correct Answer Incorrect Answer
    C ₹2 lakh (F) Correct Answer Incorrect Answer
    D ₹1 lakh (F) Correct Answer Incorrect Answer

    Solution

    Sales volume variance = (Budgeted – Actual units) × Budgeted selling price Here, sales shortfall = ₹2 lakh → Adverse variance

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