Kevin Jarvis is the controller of Bitterroot Industries.Kevin prepared the following budgeted income statement at various levels of sales.After careful review of the budgeted income statements,and after discussions with the sales and production managers,the CEO determines that the best alternative is to base the budget on a sales volume of 30,000 units.
Actual results for the year were 28,000 units, reflected in the following income statement:

What is the sales volume variance for direct labor?
A) $28,000 favorable
B) $28,000 unfavorable
C) $6,000 unfavorable
D) $30,000 favorable

Question

Kevin Jarvis is the controller of Bitterroot Industries.Kevin prepared the following budgeted income statement at various levels of sales.After careful review of the budgeted income statements,and after discussions with the sales and production managers,the CEO determines that the best alternative is to base the budget on a sales volume of 30,000 units.   
Actual results for the year were 28,000 units, reflected in the following income statement:  
 
What is the sales volume variance for direct labor?
A) $28,000 favorable 
B) $28,000 unfavorable 
C) $6,000 unfavorable 
D) $30,000 favorable

Quizplus · Accepted Answer

30,000 units – 28,000 units x $450,000 ÷30,000 = $30,000 favorable

Kevin Jarvis Is the Controller of Bitterroot Industries