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

question 130

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.
-
Is the sales activity variance for the basic model favorable or unfavorable?

• A) Favorable.
• B) Unfavorable.

---

Definitions:

Methods

Functions or procedures associated with a class or object in object-oriented programming.

Catch Block

A section of code used to handle exceptions in a try-catch structure in programming languages like Java.

Exception

Refers to an event that disrupts the normal flow of a program's execution, typically arising from errors during the program's run time.

Calling Environment

The context or scope where a function or procedure is invoked or executed.