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

question 69

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 quantity variance for the basic model?

• A) $120,000.
• B) $256,000.
• C) $1,344,000.
• D) $1,600,000.

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales activity, such as rent or salaries.

Work in Process-Department X

Inventory representing partially completed goods that are still in the production process within a specific department.

Goods in Process

Inventory items that are partially completed in the production process.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest of the business owners.