Mermaid Outfitters projected sales of 78,000 units for the year at a unit sales price of $15

00. Actual sales for the year were 70,000 units at $15.00 per unit. Variable costs were budgeted at $4.50 per unit, and the actual variable cost was $4.80 per unit. Budgeted fixed costs totaled $376,000, while actual fixed costs amounted to $400,000. What is the sales volume variance for operating income?
A) $39,000 unfavorable
B) $84,000 unfavorable
C) $84,000 favorable
D) $45,000 unfavorable

B .B)
Actual Results Flexible Budget Variance Flexible Budget Sales Volume Variance Static
Budget
Units 70,000 0 70,000 8,000 U 78,000
Sales Revenue $1,050,000 $0 F $1,050,000 120,000 U $1,170,000
Variable Costs 336,000 21,000 U 315,000 36,000 F 351,000
Contribution Margin $714,000 $21,000 F $735,000 84,000 U $819,000
Fixed Costs 400,000 24,000 U 376,000 0 376,000
Operating Income/(loss) $314,000 $24,000 F $359,000 $84,000 U $443,000