Sales quantity variance

1. What does the sales quantity variance indicate?

2. If the actual quantity sold is less than the budgeted sales quantity, is the sales quantity variance favorable or unfavorable?

3. If the actual selling price is greater than the planned selling price, is the sales price variance favorable or unfavorable?

In each of the following situations, determine the month in which the business should recognize the revenue:

A. On June 5, Jacquie Monahan, an editor, received an advance from a publisher. She performed the work during the period July 8 through July 22. On August 9, Jacquie sent the publisher an accounting of her hours.

B. On February 27, Paul’s Plumbing placed an advertisement with the Kansas City Tribune. The fullpage ad ran during the week of March 15–22. The Tribune billed Paul’s Plumbing for the ad on March 7, with payment terms of n兾30. Payment was received by the Tribune on April 4.

C. On November 25, Bookworm, Inc., sold an encyclopedia to Children’s Learning Center on account. Payment was due on December 25 but was not received until January 15.


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