The static budget, at the beginning of the month, for Beacon Banner Company foll

Question

The static budget, at the beginning of the month, for Beacon Banner Company follows: Static budget: Sales volume: 1,100 units; Sales price: $70 per unit Variable costs: $33 per unit; Fixed costs: $38,300 per month Operating income: $2,400 Actual results, at the end of the month, follows: Actual results: Sales volume: 995 units; Sales price: $74 per unit Variable costs: $36 per unit, Fixed costs: $36,000 per month Operating income: $1,810 Calculate the sales volume variance for revenue. OA. $2,300 U O B. $3,980 F O C. $3,885 U O D. $7.350 U

Explanation / Answer

Standard contribution per unit : price - variable cost

                 = 70 -33

                  = $ 37

Sales volume variance : Standard contribution per unit(Actual units- Budgeted units)

                   3 7[995-1100]

                     37* 105

                     3885 U

Correct option is "C"

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