Jackson, Inc

question 128

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.
The total selling price variance of the period is:

• A) $0.
• B) $38,000 unfavorable.
• C) $67,500 unfavorable.
• D) $112,500 unfavorable.
• E) $122,000 unfavorable.

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Definitions:

Marginal Product

The additional output that is produced as a result of utilizing one more unit of a variable input, holding other inputs constant.

Equilibrium Quantity

The level of goods or services offered and demanded at the price of equilibrium.

Labor

The effort involving both mental and physical capacities of humans utilized in creating goods and services.

Marginal Productivity Theory

A principle in economics that states the compensation of a factor of production, like labor, depends on the marginal productivity of that factor.