A company uses a standard costing system. The company's sales budget for the latest period includes 1,500 units of a product with a selling price of $400 per unit. The product has a budgeted contribution to sales ratio of 30%. Actual sales for the period were 1,630 units at a selling price of $390 per unit. The actual contribution to sales ratio was 28%. The sales volume contribution variance for the product for the latest period is:

Question

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The sales volume contribution variance is calculated as (Actual units sold - Budgeted units sold) x Budgeted contribution per unit. The budgeted contribution per unit is 30% of the selling price, which is $400 x 30% = $120. The variance is (1,630 - 1,500) x $120 = $15,600 F.

A Company Uses a Standard Costing System