Question: Winston Co. had two products code named X and Y. The firm had the following budget for August: Product X Product Y Total Sales $
Winston Co. had two products code named X and Y. The firm had the following budget for August:
| Product X | Product Y | Total | ||||||||||
| Sales | $ | 286,000 | $ | 520,000 | $ | 806,000 | ||||||
| Variable Costs | 189,800 | 218,400 | 408,200 | |||||||||
| Contribution Margin | $ | 96,200 | $ | 301,600 | $ | 397,800 | ||||||
| Fixed costs | 50,000 | 108,000 | 158,000 | |||||||||
| Operating Income | $ | 46,200 | $ | 193,600 | $ | 239,800 | ||||||
| Selling Price per unit | $ | 110.00 | $ | 50.00 | ||||||||
On September 1, the following actual operating results for August were reported:
| Product X | Product Y | Total | ||||||||||
| Sales | $ | 360,000 | $ | 540,000 | $ | 900,000 | ||||||
| Variable Costs | 195,000 | 216,000 | 411,000 | |||||||||
| Contribution Margin | $ | 165,000 | $ | 324,000 | $ | 489,000 | ||||||
| Fixed costs | 50,000 | 108,000 | 158,000 | |||||||||
| Operating Income | $ | 115,000 | $ | 216,000 | $ | 331,000 | ||||||
| Units Sold | 3,000 | 9,000 | ||||||||||
Total industry volume for both products X and Y was estimated to be 130,000 units at the time of the budget. Actual industry volume for the period for products X and Y was 100,000 units.
The contribution margin sales volume variance for Product Y is:
Multiple Choice
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$40,600 unfavorable.
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$20,500 favorable.
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$30,600 favorable.
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$91,000 unfavorable.
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$16,000 unfavorable.
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