Kane Corporation has a practical production capacity of 1 million units. The current year’s master budget was based on the production and sales of 700,000 units during the current year.

Actual production for the current year was 720,000 units while actual sales amounted to only 600.000 units. The units are sold for $20 each and the gross margin ratio is 30%. The dollar amount which best quantifies the marketing department’s failure to achieve budgeted performance for the current year is: 569

$2,400,000 unfavorable

$2,000,000 unfavorable

$720,000 unfavorable

$600,000 unfavorable.

Some amount other than those given above

(AICPA Adapted.)