Question

 The Corata Appliance Manufacturing Corporation manufactures two vacuum Cleaners, the Standard and the Super. The following information was gathered about the two products

What is the total sales-quantity variance in terms of the contribution margin? Round Intermediary calculations to two decimal places.) 

A $136.240 favorable 

B. $495.760 favorable 

C. $179,760 favorable 

D. $316,000 favorable

Answer 1

Ans.	Option B   $495,760
	Items	AS - BS (a)	Sales mix (b)	Budgeted CM per unit ©	Sales quantity variance (a*b*c)
	Standard	4,200 - 3,400 = 800	0.79	$500.00	$316,000
	Super	4,200 - 3,400 = 800	0.21	$1,070.00	$179,760
	Total Sales Quantity Variance				$495,760
	*Calculations:
	AS = Total Actual sales in units (2,800 + 1,400 = 4,200)
	BS = Total Budgeted sales in units (2,700 + 700 = 3,400)
	CM = Contribution margin
	*Calculations for Sales mix:
	Total budgeted sales in units (2,700 + 700)   = 3,400
	Sales mix = Budgeted sales in units for particular product / Total budgeted sales in units
	Standard	2,700 / 3,400	0.79
	Super	700 / 3,400	0.21
	*Actual sales are higher than the budgeted sales, so the variance is favorable.