The following information was drawn from the accounting records of Ashton Compan

Question

The following information was drawn from the accounting records of Ashton Company.

Budgeted

Actual

  Sales

$ 5,000

$ 6,000

  Cost of Goods Sold

(3,000)

(3,600)

  Gross Margin

2,000

2,400

  Variable Cost

(1,000)

(1,200)

  Fixed Cost

(500)

(400)

  Net Income

$    500

$    800

Based on this information Ashton Company has a

a. $300 favorable sales variance

b. $300 unfavorable sales variance

c. $1,000 favorable sales variance

d. $1,000 unfavorable sales variance

The following information was drawn from the accounting records of Ashton Company.

Explanation / Answer

c. $1,000 favorable sales variance Sales variance is the difference between actual sales and budget sales. BudgetedSales            5,000.00 Actual Sales            6,000.00 Sales Variance = Actual Sales - Budgeted Sales Sales Variance = 6000-5000 Sales Variance = 1000 Favourable

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