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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 $324,00
0Less 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) $26,000 F.
B) $2,600 F.
C) $7,400 U.
D) $10,000 F.
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