What is the sales activity variance for the basic model?
A)$1,280,000
B)$1,600,000
C)$11,200,000
D)$12,800,000

Question

Quizplus · Accepted Answer

The sales activity variance can be calculated by subtracting the expected sales from the actual sales. For the basic model, the expected sales are 8,000 units x $200,000 per unit = $1,600,000. The actual sales are 10,000 units x $200,000 per unit = $2,000,000. Therefore, the sales activity variance is $2,000,000 - $1,600,000 = $400,000. Choice B is the closest answer.

What Is the Sales Activity Variance for the Basic Model