The correct answer is: $41,000

The fixed overhead expenditure variance is not relevant to a reconciliation of budgeted and actual contributions. Fixed costs are deducted afterwards from contribution to arrive at profit. The figure of $40,000 given in the question as the 'standard contribution on actual sales' means that the effect of the sales volume contribution variance has already been taken into account in arriving at that figure of $40,000. Budgeted contribution is adjusted for the sales volume contribution variance to arrive at the figure for 'standard contribution on actual sales'. Therefore the only variance that needs to be taken into account in this particular question is the favourable sales price variance as follows: [40,000 + 1,000] = $41,000.