When Actual Variable Cost Per Unit Equals Standard Variable Cost

question 50

Multiple Choice

When actual variable cost per unit equals standard variable cost per unit, the difference between actual and budgeted contribution margin is explained by a combination of which two variances?

• A) The sales-volume variance and the fixed-overhead volume variance.
• B) The sales-volume variance and the fixed-overhead budget variance.
• C) The sales-price variance and the fixed-overhead volume variance.
• D) The sales-price variance and sales-volume variance.
• E) The sales-price variance and fixed-overhead budget variance.

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Definitions:

Just-In-Time (JIT)

An inventory management strategy that aims to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

Multiple Sourcing

A procurement strategy where a company uses several suppliers for a certain component or product to reduce dependency on a single source.

Request for Proposal (RFP)

A document issued by a company asking for detailed proposals from potential suppliers or contractors for a specific project or service.

Specifications

Detailed descriptions of the requirements, characteristics, or performance standards of a product, service, or material.