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

question 15

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 selling price variance for Product X is:

• A) $7,500 favorable.
• B) $26,000 unfavorable.
• C) $30,000 unfavorable.
• D) $40,000 favorable.
• E) $40,000 unfavorable.

---

Definitions:

Trade Surplus

A situation where a country exports more goods and services than it imports, leading to a positive balance of trade.

Tariffs

Taxes imposed on imported goods, often used to protect domestic industries from foreign competition.

Fair Trade

A social movement and market-based approach that aims to help producers in developing countries achieve better trading conditions and promote sustainability.

Free Trade

International trading practices characterized by minimal governmental intervention regarding tariffs, allowing for the unobstructed exchange of goods and services.