Answer the Following Questions Using the Information Below:
the Fortise

question 79

Multiple Choice

Answer the following questions using the information below:
The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for residences. Budgeted and actual operating data for the year 2015 were as follows:
$$\begin{array}{l}\begin{array} { l r r r } \text { Static Budget } & \text { Victor } & \text { House-Mate } & \text { Total } \\\hline \text { Number sold } & 6,000 & 24,000 & 30,000\\\text { Contribution margin } &\$ 1,560,000 & \$ 3,120,000 &\$ 4,680,000\\\\\text { Actual Results } & \text { Victor } & \text { House-Mate } & \text { Total } \\\text { Number sold } & 5,000 & 35,000 & 40,000 \\\text { Contribution margin } & \$ 1,400,000 & \$ 4,130,000 & \$ 5,530,000\end{array}\end{array}$$
-What is the total static-budget variance in terms of the contribution margin?

• A) $900,000 favorable
• B) $850,000 favorable
• C) $250,000 unfavorable
• D) $450,000 unfavorable

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Definitions:

Demand

The desire and willingness of consumers to purchase goods or services at a given price over a specific time period.

Capacity

Pertains to the highest amount of production a business can maintain for creating a product or delivering a service.

Supply Chain

A network between a company and its suppliers to produce and distribute a specific product to the final buyer, involving the flow of materials, information, and finances.

Efficiency

The degree to which an organization or process accomplishes its intended goals with a minimum of waste, expense, or unnecessary effort.