If variable cost of goods sold totaled $65,900 for the year (16,475 units at $4 each) and the planned variable cost of goods sold totaled $108,200 (13,525 units at $8 each), the effect of the quantity factor on the change in contribution margin is: a. $23,600 increase b. $11,800 decrease c. $11,800 increase d. $23,600 decrease

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Business

Precious Francis

8 December, 04:16

If variable cost of goods sold totaled $65,900 for the year (16,475 units at $4 each) and the planned variable cost of goods sold totaled $108,200 (13,525 units at $8 each), the effect of the quantity factor on the change in contribution margin is: a. $23,600 increase b. $11,800 decrease c. $11,800 increase d. $23,600 decrease

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Brayan Charles · Answer 1

Answer: The correct answer is D) $23,600 decrease

Explanation: The variation in quantity is the difference between actual and budgeted units, measured at the budgeted price per unit. It shows what produces a greater or lesser volume in the expected costs.

It can be summed up in the formula = (Actual quantity - Budgeted quantity) x Budgeted unit price

We calculate: (16475 - 13525) x 8 = 23600.