Answer the following questions using the information below:
Melville Incorporated planned to use $37.50 of material per unit but actually used $36.75 of material per unit, and planned to make 1,800 units but actually made 1,600 units.
-The sales-volume variance is:
A)$7,500 favorable
B)$7,500 unfavorable
C)$1,200 unfavorable
D)$1,200 favorable

Question

Quizplus · Accepted Answer

Sales-volume variance = (Actual units sold - Planned units sold) x Planned material cost per unit
Sales-volume variance = (1,600 - 1,800) x $37.50
Sales-volume variance = -200 x $37.50
Sales-volume variance = $7,500 unfavorable.

Therefore, the correct answer is option B, which is $7,500 unfavorable.

Answer the Following Questions Using the Information Below