Nappon Co. has two products named X and Y. The firm had the following master budget for the year just completed: Product X Product Y Total Sales $ 243,000 $ 374,000 $ 617,000 Variable Costs 146,000 149,600 295,600 Contribution Margin $ 97,000 $ 224,400 $ 321,400 Fixed costs 130,000 108,000 238,000 Operating Income (Loss) $ (33,000 ) $ 116,400 $ 83,400 Selling Price per unit $ 100 $ 50 The following actual operating results were reported after the year was over: Product X Product Y Total Sales $ 366,800 $ 546,800 $ 913,600 Variable Costs 203,500 224,500 428,000 Contribution Margin $ 163,300 $ 322,300 $ 485,600 Fixed costs 210,400 116,500 326,900 Operating Income (Loss) $ (47,100 ) $ 205,800 $ 158,700 Units Sold 3,170 9,850 The sales quantity variance for Product Y is:

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.