Question

For the first week of the month, the Flour Shop Bakery budgeted to sell 100 cakes at $35 each. They actually sold 105 cakes at $40 each. The selling-price variance is:_________.a) $525 favorable.b) $525 unfavorable.c) $700 favorable.d) $700 unfavorable.

Answer 1

a) $525 favorable

Step-by-step explanation:

The computation of the selling price variance is shown below:

The Selling price variance is

= Actual quantity sold × (actual selling price - expected selling price)

= 105 cakes × ($40 - $35)

= 105 cakes × $5

= $525 favorable

Hence, the selling price variance is $525 favorable

Therefore the correct option is a.

We simply applied the above formula so that the correct value could come

And, the same is to be considered