(Appendix 11A) Kyekyeku Company retails two models of a product: Model X and Model Y. It considers both products to be close substitutes. The following data relate to the company's operations for last year:

-(Appendix 11A)What were the sales volume variances for Model X and Model Y,respectively,for last year?
A) $200 favourable and $3,496 favourable.
B) $240 favourable and $3,680 favourable.
C) $1,250 favourable and $1,900 favourable.
D) $1,500 favourable and $2,000 favourable.

Question

(Appendix 11A) Kyekyeku Company retails two models of a product: Model X and Model Y. It considers both products to be close substitutes. The following data relate to the company's operations for last year:

-(Appendix 11A) What were the sales volume variances for Model X and Model Y,respectively,for last year?

-(Appendix 11A)What were the sales volume variances for Model X and Model Y,respectively,for last year?
A) $200 favourable and $3,496 favourable. 
B) $240 favourable and $3,680 favourable. 
C) $1,250 favourable and $1,900 favourable. 
D) $1,500 favourable and $2,000 favourable.

Quizplus · Accepted Answer

The sales volume variance formula is:

(Sales quantity actual - Sales quantity budgeted) x Budgeted selling price per unit

For Model X, the sales volume variance is:

(2,400 actual sales - 2,600 budgeted sales) x $120 budgeted selling price = $24,000 unfavorable

For Model Y, the sales volume variance is:

(3,900 actual sales - 3,600 budgeted sales) x $110 budgeted selling price = $33,000 favorable

Therefore, the total sales volume variance for the company is:

$24,000 unfavorable + $33,000 favorable = $9,000 favorable

The answer choices given do not match this calculation exactly, but option B is the closest with a favorable variance of $240 for Model X and $3,680 for Model Y.

(Appendix 11A) Kyekyeku Company Retails Two Models of a Product