Answer (A) is correct . The sales quantity variance is the difference between the actual volume and the budgeted volume in units, times the budgeted weighted-average contribution margin for all units. = (Actual Volume – Budgeted Volume) × (Selling Price?– Unit?Variable?Cost) = (42,000 – 40,000) × ($6 – $3.50) = $5,000 F
Answer (B) is incorrect because The budgeted selling price and budgeted variable cost must be used to determine the sales quantity variance, not the actual selling price and actual variable cost.
Answer (C) is incorrect because The budgeted variable cost must be subtracted from the selling price before multiplying by the 2,000 difference in units actually sold from budgeted sales.
Answer (D) is incorrect because The sales quantity variance is found by multiplying the 2,000 unit difference between actual and budgeted sales by the $2.50 budgeted contribution margin.
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What is the sales quantity variance for July?
