Which of the following best represents the general model for calculating a quantity variance in the context of net sales?

• A. (Actual Quantity Sold - Budgeted Quantity Sold) × Standard Selling Price
• B. Actual Quantity Sold × (Actual Price - Standard Price)
• C. Standard Quantity Allowed × (Standard Price - Actual Price)
• D. (Actual Sales Revenue - Net Sales Revenue) × Standard Price

Answer: (A)

Verified step by step guidance

1. Understand the context: A quantity variance in the context of net sales measures the difference between the actual quantity sold and the budgeted quantity sold, multiplied by the standard selling price. This helps assess how much of the variance in sales revenue is due to differences in quantity sold.
2. Identify the formula components: The formula for quantity variance is (Actual Quantity Sold - Budgeted Quantity Sold) × Standard Selling Price. Here, 'Actual Quantity Sold' refers to the actual number of units sold, 'Budgeted Quantity Sold' refers to the planned or expected number of units to be sold, and 'Standard Selling Price' is the price per unit that was planned or expected.
3. Compare the options: Evaluate each option provided in the problem. The correct formula should focus on the difference in quantities (actual vs. budgeted) and multiply it by the standard selling price. Eliminate options that involve price variances or other unrelated calculations.
4. Match the correct formula: The correct option is (Actual Quantity Sold - Budgeted Quantity Sold) × Standard Selling Price, as it directly calculates the quantity variance in the context of net sales.
5. Conclude: The other options provided in the problem involve price variances or unrelated calculations, which do not align with the definition of a quantity variance in this context.