Kid Adventures Company projected current year sales of 3,600 swing sets at a unit sale price of $225.00.Actual current year sales were 3,300 units at $215.00 per unit.Actual variable costs,budgeted at $166.00 per unit,totaled $175.00 per unit.Budgeted fixed costs totaled $122,000 while actual fixed costs amounted to $118,000.
-What is the sales volume variance for operating income?

Question

Quizplus · Accepted Answer

The sales volume variance for operating income is calculated as the difference between the budgeted and actual sales volume, multiplied by the budgeted contribution margin per unit. The budgeted contribution margin per unit is the budgeted sale price minus the budgeted variable cost per unit ($225 - $166 = $59). The difference in sales volume is 300 units (3,600 - 3,300). Therefore, the sales volume variance is 300 units * $59 = $17,700 unfavorable.

Kid Adventures Company Projected Current Year Sales of 3,600 Swing