Question

Duo, Inc., carries two products and has the following year-end income statement (000s omitted): Product AR-10 Product ZR-7 Budget Actual Budget Actual Units 2,000 2,800 6,000 5,600 Sales $ $ 6,000 $ 7,560 $ 12,000 $ 11,760 Variable costs 2,400 2,800 6,000 5,880 Fixed Costs 1,800 1,900 2,400 2,400 Total Costs $ 4,200 $ 4,700 $ 8,400 $ 8,280 Operating income $ 1,800 $ 2,860 $ 3,600 $ 3,480 The sales quantity variance that would complement the variance calculated in the previous question is:

Answer 1

Answer:

$480

Explanation:

Calculation to determine what The sales quantity variance that would complement the variance calculated in the previous question is:

First step is to calculate Sales mix: budget for

AR-10

Total units: budget = 2,000 + 6,000

Total units: budget = 8,000

Actual units = 2,800 + 5,600

Actual units= 8,400

Sales mix: budget: 2000/8000

Sales mix: budget = 25%

(8,400-8,000) x.25 x $1.80

= $180 favorable

For ZR-7:Sales mix: budget: 6000/8000 = 75%(8400-8000) x.75 x $1.00 = $300

favorableTotal quantity variance: $180 + $300 = $480

.

Therefore The sales quantity variance that would complement the variance calculated in the previous question is:$480