Lola Inc. produces a product with the following revenue and cost structure: Sell
ID: 2546184 • Letter: L
Question
Lola Inc. produces a product with the following revenue and cost structure:
Selling price
$87.92
Variable cost per unit
42.41
Fixed costs
800,000
Budgeted production and sales for the year ending December 31, 20x9 is 24811 units.
The actual results at the end of the year, December 31, 20x9, are given below:
Actual selling price
$83.87
Variable cost per unit
23.94
Fixed costs
850,000
Actual volume
29687
What is Lola’s sales volume variance for the year 20x9? Note: a negative number represents an unfavourable variance and a positive number represents a favourable variance.
Select one:
a. $292219
b. $-120232
c. $-221907
d. $221907
Selling price
$87.92
Variable cost per unit
42.41
Fixed costs
800,000
Explanation / Answer
d. $221,907
Sales Voulme variance = (Actual units sold - Budgeted units sold) × Standard price per unit
= (29,687 - 24,811) × $45.51
= $221,907 F
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