The Vargas Company Had the Following Expectations for the Year

question 92

Multiple Choice

The Vargas Company had the following expectations for the year:
$\begin{array}{ll}\text {Budgeted results for the year were: }\\\text {Total market for the product}&175,000 \mathrm{units}\\\text { Vargas' budgeted sales } & \$ 1,763,125 \\\text { Variable costs per unit } & \$ 18.75 \\\text { Selling price per unit } & \$ 32.50\\\text { Actual results for the year were: }\\\text { Total market for the product}&166,250 \mathrm{units}\\\text { Vargas's actual sales}&56,525\\\text { Total Variable costs}&\$1,073,975\\\text { Total sales}&\$1,752,275\end{array}$
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What is Vargas' industry volume variance?

• A) $37,296.88.
• B) $40,906.25.
• C) $35,700.00.
• D) $32,550.00.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a specific price level, holding all other factors constant.

Quantity Supplied

The amount of a good or service that producers are willing and able to offer for sale at a given price during a specified period.

Excess Demand

A situation where the quantity demanded of a good or service exceeds the quantity supplied at the current price.

Excess Demand

A situation in a market where the quantity demanded of a good or service surpasses the quantity supplied at the current price, leading to upward pressure on prices.