The Following Static Budget Is Provided What Will Be the Overall Volume Variance If 12,000 Units

question 125

Multiple Choice

The following static budget is provided: $\begin{array}{lc}&\text { Per Unit }&\text {Total }\\\text { Sales }&\$60&\$900,000\\\text { Less variable costs: }\\ \text { Manufacturing costs } &30 & 450,000 \\ \text { Selling and administrative costs } & \underline{10} & \underline{ 150,000} \\\text { Contribution margin }&\$20&\$300,000\\\text { Less fixed costs: }\\\text { Manufacturing costs } && 75,000 \\\text { Selling and administrative costs } && \underline{ 125,000} \\\text { Total fixed costs } && \underline{ 200,000} \\\text { Net income } && \underline{ \$ 100,000}\end{array}$ What will be the overall volume variance if 12,000 units are produced and sold?

• A) $80,000 F
• B) $80,000 U
• C) $60,000 U
• D) $160,000 U

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Definitions:

Separately Reportable

Items or activities that must be individually disclosed in financial statements due to their significance or regulatory requirements.

Operating Profit Or Loss Test

A financial measure used to determine a company's profitability from its core business operations, excluding non-operational factors.

Operating Segments

Components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources.

Revenue Test

A criterion used to gauge the amount of revenue generated by a company, project, or product, crucial for decision-making and financial analysis.