Becker hw. problem: Central Winery manufactured 2 products, A&B. Estimated demand for Product A was 10,000 bottles and for product B was 30,000 bottles.  The estimated sales price per bottle for A was $6.00 and for B was $8.00.  Actual demand for product A was 8,000 bottles and for product B was 33,000 bottles.  The actual price per bottle for A was $6.20 & for B was $7.70.  What amount would be the total selling price variance for Central Winery?

Answer: b. $8,300 unfavorable

SPV = (Actual SP per unit - Budgeted SP per unit) x Actual units sold

SPV Product A = (6.20-6.00) x 8,000 = $1,600

SPV Product B = (7.70-8.00) x 33,000 = ($9,900)

Total SPV = ($8,300) Unfavorable.

HOWEVER; shouldn't we be using the "SAD" Standard less Actual to calc the difference? If that's the case it would equate to a Favorable variance??

Right, because they're taking the difference between the Actual less Budgeted.

But if we use "SAD" I thought it was Standard less Actual.

So - Product A: (6.00 -6.20) x 8,000 = ($1,600) U

Product B: (8.00-7.70) x 33,000 = 9,900 F

Net $8,300 F