The static budget,at the beginning of the month,for La Verne Company follows: $\underline{\text{Static budget:}}$
Sales volume: 2100 units: Sales price: $57.00 per unit
Variable cost: $13.00 per unit: Fixed costs: $25,000 per month
Operating income: $67,400
$\underline{\text{Actual results,at the end of the month,follows:}}$
$\underline{\text{Actual results:}}$
Sales volume: 1900 units: Sales price: $58.00 per unit
Variable cost: $17.00 per unit: Fixed costs $35,000 per month
Operating income: $42,900
Calculate the sales volume variance for variable costs.
A)$8800 U
B)$2600 F
C)$200 U
D)$8800 F

Question

Quizplus · Accepted Answer

Sales volume variance for variable costs can be calculated as (actual sales volume * actual variable cost) - (budgeted sales volume * budgeted variable cost) = (1900 * 17) - (2100 * 13) = 32300 - 27300 = $5000 F. Therefore, the best choice is option B which shows $2600 F (as it is the closest option to $5000 F).

The Static Budget,at the Beginning of the Month,for La Verne Static budget:‾\underline{\text{Static budget:}}Static budget:​

The Static Budget,at the Beginning of the Month,for La Verne $\underline{\text{Static budget:}}$