The Sales Volume Variance Was:
A) $16,000 Favorable

question 74

Multiple Choice

$\begin{array}{lcc}\text { Item to Classify } &\text { Standard } &\text {Actual }\\\text { Sales volume } & 100,000 \text { units } &96,000 \text { units }\\\text { Sales price } & \$ 4 \text { per unit }&\$3.90 \text { per unit } \\\text { Material usage } & 40,000 \text { gallons } &42,000 \text { gallons }\\ \text { Labor price } & 12.50\text { per hour }&12.45 \text { per hour }\end{array}$
The sales volume variance was:

• A) $16,000 favorable.
• B) $16,000 unfavorable.
• C) $25,000 unfavorable.
• D) $25,000 favorable.

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Definitions:

Increase Liabilities

The process or action that results in a higher amount of obligations or debts owed by an entity to others.

Decrease Net Income

Refers to a reduction in the net earnings as reported on an entity's income statement, influenced by costs, expenses, or losses.

Accrual

The accounting method that recognizes revenues and expenses when they are incurred, regardless of when cash transactions occur.

Wages Expense

The total cost incurred by a company for the salaries or wages of its employees.