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Folsom Fashions sells a line of women's dresses. Folsom's performance report for November is shown below. The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income.
Actual
Budget
Dresses sold
5,000
6,000
Sales
$235,000
$300,000
Variable costs
($145,000)
($180,000)
Contribution margin
$90,000
$120,000
Fixed costs
($84,000)
($80,000)
Operating income
$6,000
$40,000
1. The effect of the sales quantity variance on the contribution margin for November is:
$30000 U , $18000 U, $20000 U , $15000 U
2. The sales price variance for November is:
$30000 U , $18000 U , $20000 U , $15000 U
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