Jackson, Inc

question 118

Multiple Choice

Jackson, Inc., manufactures two products that it sells to the same market. Excerpted below are its budgeted and actual operating results for the year just completed:Industry volume was estimated to be 1,875,000 units at the time the budget was prepared. Actual industry volume for the period was 2,440,000 units. Jackson measures variances using contribution margin.

If fixed costs are budgeted for $500,000 and are actually $500,000, what is the difference between budgeted and actual operating income?

• A) $3,200 favorable.
• B) $5,800 favorable.
• C) $122,500 unfavorable.
• D) $65,550 favorable.
• E) $23,455 favorable.

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Definitions:

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and ultimately to the end-user.

Horizontal Collaboration

A strategic partnership between firms at the same level in the supply chain, aimed at improving efficiency or gaining market advantage.

3PLs to 3PLs

The interaction or service exchange between third-party logistics providers, often to leverage each other's resources or networks.

Buyer to Buyer

A transaction or interaction that occurs directly between buyers, typically in a marketplace setting without intermediary sellers.