Reference no: EM132610188

Alaska Company expressed the total expenses (Y) component of its master budget for February with the cost formula Y = $100,000 + $40 * X, where X represents the expected number of units of its only product to be manufactured and sold. The budgeted average selling price per unit was $65 for budgeted sales volume 5,000 units.

Reported actual results for February were as follows:

Sales                               5,400 units

Sales revenue                   $324,000

Less variable costs             194,400

Contribution margin            $129,600

Less fixed expenses              102,000

Operating income                   $27,600

Problem 1: What was the sales volume variance for February?

A) $2,600 F.

B) $7,400 U.

C) $26,000 F.

D) $10,000 F.