Caf Co budgeted to sell 10,000 units of a new product in the period at a budgeted selling price of $5 per unit. Actual sales volumes in the period were as budgeted but the actual sales price achieved was only $4 per unit. This was because a competitor launched a similar product at the same time. Caf Co had been unaware that this was going to happen when it prepared its budget and, had it known this, it would have revised its expected selling price to $3·80 per unit, which was the price of the competitor’s product.

What is the sales price planning variance?

A. $12,000 A
B. $12,000 F
C. $2,000 F
D. $2,000 A