A Machine Distributor Sells Two Models,basic and Deluxe What Is the Sales Activity Variance for the Deluxe Model

question 11

Multiple Choice

A machine distributor sells two models,basic and deluxe.The following information relates to its master budget.Actual sales were 7,000 basic models and 2,800 deluxe models.The actual sales prices were the same as the budgeted sales prices for both models. $$\begin{array} { | l | r | r | } \hline & \text { Basic } & \text { Deluse } \\\hline \text { Sales (units) } & 8,000 & 2,000 \\\hline \text { Sales price per unit } & \$ 8,000 & \$ 12,000 \\\hline \text { Variable costs per unit } & \$ 6,400 & \$ 9,000 \\\hline\end{array}$$ What is the sales activity variance for the deluxe model?

• A) $400,000.
• B) $800,000.
• C) $1,600,000.
• D) $2,400,000.

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Definitions:

Promising to Pay

A commitment or agreement by an individual or entity to fulfill a financial obligation at a future date.

Interest

The cost of borrowing money or the return that is earned on invested funds, typically expressed as an annual percentage rate.

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Likely referring to the utilization of financial resources or capital for transactions, investments, or other financial activities.

Term

A fixed or limited period for which something, such as an agreement or investment, lasts or is intended to last.