Answer (B) is correct . The volume variance isolates the effect of selling more or less units than budgeted. It equals budgeted unit contribution margin (UCM) times the difference between budgeted and actual units sold. Given expected sales of 4,000 units and revenue of $60,000, unit price is $15. Variable costs are $16,000 for manufacturing and $8,000 for selling, and unit variable cost is $6 ($24,000 ÷ 4,000 units). The UCM is $9 ($15– $6). Since actual sales were 200 units less than budgeted (4,000 – 3,800), the lost contribution margin was $1,800 (200 × $9). This variance is unfavorable because actual sales were less than budgeted.
Answer (A) is incorrect because The difference between budgeted and actual variable selling and administrative costs is $400.
Answer (C) is incorrect because The difference between budgeted and actual units is 200 units.
Answer (D) is incorrect because The difference between budgeted and actual revenue is $6,800.
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The contribution margin volume variance for the month of July would be