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Answer the Following Questions Using the Information Below:
Ceylon Tea

Question 145

Multiple Choice

Answer the following questions using the information below:
Ceylon Tea Products has an exclusive contract with West Sydney Tea Importers Corporation.Calamine and Ceylon are two brands of teas that are imported and sold to retail outlets.The following information is provided for the month of March:
 Actual  Budget  Calamine  Ceylon  Calamine  Ceylon  Sales in kg 1850 kg1650 kg2000 kg1500 kg Price per kg $2.50$2.50$2.00$3.00 Variable cost per kg 1.002.001.001.50 Contribution margin $1.50$0.50$1.00$1.50\begin{array}{c}&&&&&&&&&&&&&{ \text { Actual } } &&&&&&& { \text { Budget } } \\\end{array}\\\begin{array} { l r r r r r } & \text { Calamine } & \text { Ceylon } & & \text { Calamine } & \text { Ceylon } \\\text { Sales in kg } & 1850 \mathrm {~kg} & 1650 \mathrm {~kg} & & 2000 \mathrm {~kg} & 1500 \mathrm {~kg} \\\text { Price per kg } & \$ 2.50 & \$ 2.50 & & \$ 2.00 & \$ 3.00 \\\text { Variable cost per kg } & \underline { 1.00 } & \underline { 2.00 } && \underline { 1.00 } & \underline { 1.50 } \\\text { Contribution margin } & \underline {\$ 1.50} & \underline { \$ 0.50} & & \underline { \$ 1.00} & \underline { \$ 1.50}\end{array} Budgeted and actual fixed corporate-sustaining costs are $1750 and $2000,respectively.
-For the contribution margin,what is the total static-budget variance?


A) $725 unfavourable.
B) $300 favourable
C) $500 favourable
D) $650 unfavourable

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