Onyx Company has prepared a static budget at the beginning of the month. At the

Question

Onyx Company has prepared a static budget at the beginning of the month. At the end of the month, the following information has been retrieved from the records. Calculate the sales volume variance for revenues. Static budget: Sales volume: 1,000 units: Price: $70 per unit Variable expense $32 per unit: Fixed expense: $37,500 per month Operating income $500 Actual results: Sales volume: 990 units: Price $74 per unit Variable expense $35 per unit Fixed expense $33,000 per month Operating income $5,610 $5,960 F $380 U $700 U $4,500 U

Explanation / Answer

standard contribution per unit = selling price -variable cost

                                              = 70-32 = 38

sales volume variance = (actual units -Budgeted units)*standard contribution per unit

                            = (990 -1000 ) * 38

                            = - 10 *38

                           = -380 (U)

correct option is "B"

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