Nappon Co Has Two Products Named X and Y $\text { The following actual operating results were reported after the year was over: }$

question 66

Multiple Choice

Nappon Co. has two products named X and Y. The firm had the following master budget for the year just completed: $\begin{array}{lrrr} & \text { Product X } & \text { Product Y } & \text { Total } \\\text { Sales } & \$ 260,000 & \$ 360,000 & \$ 620,000 \\\text { Variable Costs } & 156.000 & 180,000 & 336,000\\\text { Contribution Margin } & \$ 104,000 & \$ 180,000 & \$ 284,000 \\\text { Fixed costs } & 130,000 & 108,000 & 238,000\\\text { Operating Income (Loss) }&\$(26,000) &\$72,000&\$46,000\\\text { Selling Price per unit }&\$130.00&\$60.00\end{array}$

$\text { The following actual operating results were reported after the year was over: }$

$\begin{array}{lrrr} & \text { Product X } & \text { Product Y } & \text { Total } \\\text { Sales } & \$ 202,500 & \$ 467,500 & \$ 670,000 \\\text { Variable Costs } & 117.000 & 212,500 & 329,500\\\text { Contribution Margin } & \$ 85,500 & \$ 255,000 & \$ 340,500 \\\text { Fixed costs } & 140,000 & 108,000 & 248,000\\\text { Operating Income (Loss) } & \$(54,500) & \$ 147,000 & \$ 92,500\\\text { Units Sold } & 1,500 & 8,500\end{array}$ The sales quantity variance for Product X is:

• A) $4,000 favorable.
• B) $25,000 favorable.
• C) $26,000 favorable.
• D) $45,000 favorable.
• E) $52,000 unfavorable.

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Definitions:

Risk Averse

Describes individuals or entities that prefer to avoid risk, often opting for safer investments even with potentially lower returns.

Indifference Curve

A curve representing all combinations of goods or services among which a consumer is indifferent, showing different combinations that provide the same level of utility to the consumer.

Expected Return

The anticipated profit or loss from an investment, taking into account the possibility of various outcomes.

Standard Deviation

A parameter that assesses the extent of difference or range within a batch of numerical values.