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A machine distributor sells two models, basic and deluxe. The following information relates to its master budget. Basic Deluxe Sales (units) 8,000 2,000 Sales price
A machine distributor sells two models, basic and deluxe. The following information relates to its master budget.
Basic | Deluxe | |
---|---|---|
Sales (units) | 8,000 | 2,000 |
Sales price per unit | $ 8,000 | $ 12,000 |
Variable costs per unit | $ 6,400 | $ 9,000 |
Actual sales were 7,000 basic models and 2,800 deluxe models. The actual sales prices were the same as the budgeted sales prices for both models.
Is the sales quantity variance for the basic model favorable or unfavorable?
Multiple Choice
Favorable
Unfavorable
The variance is zero and is neither favorable nor unfavorable.
There is not enough information to determine.
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