The Budgeted Quantity of Product P Sold by Alpha, Inc

question 110

Multiple Choice

The budgeted quantity of Product P sold by Alpha, Inc., is 1,500 units. The actual quantity sold is 1,600 units. The budgeted average unit contribution margin is $8.50. Compute the contribution margin volume variance.

• A)$950 (F)
• B)$700 (U)
• C)$850 (F)
• D)$800 (U)

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Definitions:

Biased Forecast

A forecast that consistently tends to overestimate or underestimate the actual value due to systematic errors.

Naive Approach

A forecasting technique that assumes that demand in the next period is equal to demand in the most recent period.

Time-series Model

A statistical model that analyzes a sequence of data points, typically measured at successive time intervals, to forecast future trends.

Time-series Forecasting

The use of historical data to predict future occurrences through identifying patterns or trends over time.