The budgeted contribution margin of two products is $1,000 the actual contribution margin is $500 and the total variable expenses are $750. The contribution margin variance is:
A)$500(F)
B)$500(U)
C)$750(F)
D)$750(U)

Question

Quizplus · Accepted Answer

The contribution margin variance is the difference between the budgeted contribution margin and the actual contribution margin.

Budgeted contribution margin = $1,000
Actual contribution margin = $500
Contribution margin variance = $1,000 - $500 = $500 (U)

The total variable expenses are not relevant to the calculation of the contribution margin variance.

The Budgeted Contribution Margin of Two Products Is $1,000 the Actual