The actual volume and volume estimated in a business plan are 60,000 units and 55,000 units,respectively.If the volume variance of the business works out to $30,000,calculate the margin per unit estimated in the plan.
A)$6
B)$10
C)$15
D)$18.5
E)$24.5

Question

Quizplus · Accepted Answer

The volume variance can be calculated as the difference between the actual volume and the estimated volume, multiplied by the margin per unit. Here, the volume variance is $30,000, and the difference in volume is 5,000 units (60,000 actual - 55,000 estimated). To find the margin per unit, divide the volume variance by the difference in volume: $30,000 / 5,000 units = $6 per unit.

The Actual Volume and Volume Estimated in a Business Plan