Question: 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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