A company has performed the following analysis for its operations PROFIT VARIANC

Question

A company has performed the following analysis for its operations PROFIT VARIANCE ANALYSIS REPORT Flexible Budget Variance Sales Volume Variance Actual Flexible Master Results Budget Budget Units Sold 20,000 20,000 5,000 U 25,000 Sales 120,000 137,500 Variable Cost 2,000 U 50,000 12,500 F 62,500 Cont. Margin 15,000 U 75,000 Fixed Cost 30,000 5,000 F 35,000 35,000 Operating Income 13,000 F 15,000 U $ 40,000 The sales volume variance for sales (C) should be Select one a. $17,500 O b. $17,500 U c. $27,500 F O d. $27,500 U

Explanation / Answer

Sales volume variance = 12500+15000 = 27500 U Option D is correct

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