The sales-quantity variance will be unfavorable when ________.
A) the composite unit for the actual mix is less than for the budgeted mix
B) the actual unit sales are less than the budgeted unit sales
C) the actual contribution margin per unit is less than the static-budget contribution margin
D) the actual sales mix shifts toward the less profitable units

Question

Quizplus · Accepted Answer

The sales-quantity variance compares the actual unit sales with the budgeted unit sales. A favorable variance would occur if the actual unit sales are higher than the budgeted unit sales, while an unfavorable variance would occur if the actual unit sales are lower than the budgeted unit sales. Therefore, option B is correct. Options A, C, and D relate to other variances, such as the sales-mix variance and the contribution-margin variance.

The Sales-Quantity Variance Will Be Unfavorable When ________