Reference no: EM132607850

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.