Jackson, Inc., manufactures two products that it sells to the same market. Excerpted below are its budgeted and actual operating results for the year just completed: Unit sales Budged Actual Product X 22,500 42,000 Product Y 90,000 80,000 Unit contribution margin Product X $4.80 $3.90 Product Y $13.00 $14.00 Unit selling price Product X $13.00 $14.00 Product Y $30.00 $29.00 Industry volume was estimated to be 1,875,000 units at the time the budget was prepared. Actual industry volume for the period was 2,440,000 units. Jackson measures variances using contribution margin. Total sales quantity variance is: $97,280 favorable. $95,190 favorable. $107,920 favorable. $84,500 favorable. $36,400 favorable.

$46,500 unfavorable

Explanation:

The computation of the total sales quantity variance is as follows:

Total sales quantity variance    

Sales quantity variance is

= (Actual quantity sold - Budgeted quantity) × Budgeted price

For product X, it would be

= (42,000 - 22,500) × $13

= $253,500 favorable  

And, For product Y, it is

= (80,000 - 90,000) × $30

= $300,000 unfavorable

So, the total would be

= $300,000 - $253,500

= $46,500 unfavorable

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