A machine distributor sells two models, basic and deluxe. The following information relates to its master budget.
$$\begin{array} { l c c }
& \text { Basic } & \text { Deluxe } \
\text { Sales (units) } & 8,000 & 2,000 \
\text { Sales price per unit } & \$ 8,000 & \$ 12,000 \
\text { Variable costs per unit } & \$ 6,400 & \$ 9,000
\end{array}$$
Actual sales were 7,000 basic models and 2,800 deluxe models. The actual sales prices were the same as the budgeted sales prices for both models.
-
What is the sales quantity variance for the deluxe model?
A) $120,000.
B) $256,000.
C) $1,344,000.
D) $1,600,000.

Question

A machine distributor sells two models, basic and deluxe. The following information relates to its master budget.
$$\begin{array} { l c c } 
& \text { Basic } & \text { Deluxe } \
\text { Sales (units) } & 8,000 & 2,000 \
\text { Sales price per unit } & \$ 8,000 & \$ 12,000 \
\text { Variable costs per unit } & \$ 6,400 & \$ 9,000
\end{array}$$
Actual sales were 7,000 basic models and 2,800 deluxe models. The actual sales prices were the same as the budgeted sales prices for both models.
-
What is the sales quantity variance for the deluxe model?
A) $120,000.
B) $256,000.
C) $1,344,000.
D) $1,600,000.

Quizplus · Accepted Answer

Sales quantity variance = (Budgeted sales units - Actual sales units) * Budgeted sales price per unit= (2,000 - 2,800) * $12,000= -800 * $12,000= -$96,000Favorable variance = $120,000

A Machine Distributor Sells Two Models, Basic and Deluxe Actual Sales Were 7,000 Basic Models and 2,800 Deluxe Models