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 = (Actual Production - Planned Production) x Standard Variable Cost per Unit
= (13,000 – 12,000) x $2.80
= $2,800 unfavorable per the production volume variance formula. However, since the actual production volume is greater than the planned production volume, the variance is unfavorable. Therefore, the correct answer is $35,200 unfavorable.

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