Sales price variance equals:
AActual sales − Budgeted
B(Actual quantity − Standard) × Standard price
CStandard price × Standard quantity
D(Actual price − Standard price) × Actual quantity
Answer & Solution
Correct answer: D. (Actual price − Standard price) × Actual quantity
1. Sales price variance captures the gap between the price actually charged and the price planned.
2. The formula values the price difference at the actual sales volume.
3. Symbolically: (Actual price − Standard price) × Actual quantity.
4. A positive figure (actual > standard) signifies a favourable variance.
_Source: ICAI BoS Inter Paper 3, Ch 13 "Standard Costing", §13.5.5 ¶2_
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