Secor Educational Services had budgeted its training service charge at $120 per hour. The company planned to provide 30, 000 hours of training services during 2019. By lowering the service charge to $114 per hour, the company was able to increase the actual number of hours to 31, 500. Required a. Determine the sales volume variance and indicate whether it is favorable (F) or unfavorable (U). Select "None" if there is no effect (i.e., zero variance).) b. Determine the flexible budget variance and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).) c. Did lowering the price of training services increase revenue?

The sales volume variance is the discrepancy between the quantity of a specific product you sold and the quantity you anticipated selling. To monitor your sales performance, you must use this metric. A key performance indicator is determined by whether the final result is positive or negative after deducting budgeted sales from actual sales. A good figure indicates that you sold more than you anticipated. The outcome will be unfavorable if your budget exceeds your sales. Given that you'll probably have to change the selling price and sell those extra units at a loss, that makes sense in terms of sales revenue.

Sales Volume Variance = (Actual hours - Budgeted hours) × Budgeted Revenue per hour

Sales Volume Variance = (31,500 - 30,000) × $120

= 1,500 × $120

= $180,000 Favorable

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