A Machine Distributor Sells Two Models, Basic and Deluxe Actual Sales Were 7,000 Basic Models and 2,800 Deluxe Models

question 108

Multiple Choice

A machine distributor sells two models, basic and deluxe. The following information relates to its master budget.
$$\begin{array} { l c c } & \text { Basic } & \text { Deluxe } \\\text { Sales (units) } & 8,000 & 2,000 \\\text { Sales price per unit } & \$ 8,000 & \$ 12,000 \\\text { Variable costs per unit } & \$ 6,400 & \$ 9,000\end{array}$$
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.
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Is the sales quantity variance for the basic model favorable or unfavorable?

• A) Favorable.
• B) Unfavorable.

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Definitions:

Elisabeth Kübler-Ross

A psychiatrist who developed the Kübler-Ross model, which outlines the five stages of grief experienced by terminally ill patients.

Stages of Dying

A conceptual framework outlining the typical phases experienced by individuals approaching death, often including denial, anger, bargaining, depression, and acceptance.

Anger

A strong feeling of displeasure and belligerence aroused by a wrong; wrath; ire.

Depression

A common and serious medical illness that negatively affects how you feel, the way you think, and how you act, marked by feelings of sadness and/or a loss of interest in activities.