Question

Which of the following situations is most likely to result in a favourable selling price variance? - The sales director decided to change from the planned policy of market skimming pricing to one of market penetration pricing. - Fewer customers than expected took advantage of the early payment discounts offered. - Competitors charged lower prices than expected, therefore selling prices had to be reduced in order to compete effectively. - Demand for the product was higher than expected and prices could be raised without adverse effects on sales volumes.

   Which of the following situations is most likely to result in a favourable selling price variance?
- The sales director decided to change from the planned policy of market skimming pricing to one of market penetration pricing.
- Fewer customers than expected took advantage of the early payment discounts offered.
- Competitors charged lower prices than expected, therefore selling prices had to be reduced in order to compete effectively.
- Demand for the product was higher than expected and prices could be raised without adverse effects on sales volumes.

ACCA FMA/FA Foundations in Accountancy-Management Accounting Interactive Text (Practice Revision Kit Not Included)

BPP Learning Media 1st Edition

Chapter 14, Problem 2

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Step 1

A favorable selling price variance occurs when the actual selling price per unit is higher than the standard or expected selling price per unit. This results in higher revenue than anticipated. Show more…

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Which of the following situations is most likely to result in a favourable selling price variance? - The sales director decided to change from the planned policy of market skimming pricing to one of market penetration pricing. - Fewer customers than expected took advantage of the early payment discounts offered. - Competitors charged lower prices than expected, therefore selling prices had to be reduced in order to compete effectively. - Demand for the product was higher than expected and prices could be raised without adverse effects on sales volumes.

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