Timberlake Company planned for a production and sales volume of 12,000 units. However, the company actually made and sold 13,000 units. What was the total variable cost volume variance?
A) $29,800 unfavorable
B) $29,800 favorable
C) $35,200 unfavorable
D) $35,200 favorable

Question

Timberlake Company planned for a production and sales volume of 12,000 units. However, the company actually made and sold 13,000 units.  What was the total variable cost volume variance?
A) $29,800 unfavorable 
B) $29,800 favorable 
C) $35,200 unfavorable 
D) $35,200 favorable

Quizplus · Accepted Answer

Total variable cost volume variance = Static budget (based on planned volume) − Flexible budget (based on actual volume)
Total variable cost volume variance = ($132,000 + $108,000 + $50,400 + $132,000) − ($143,000 + $117,000 + $54,600 + $143,000)
Total variable cost volume variance = $422,400 + $457,600 = $35,200
Since the actual costs were greater than the planned costs, the variance is unfavorable.

Timberlake Company Planned for a Production and Sales Volume of 12,000