UNIT 8 $6,860 ($9,800 X .70) COST OF NEXT 7 UNITS = (8 X $6,860...

90. Correct answer c. The sales-volume variance is $16,000 favorable as shown below.

Flexible Budget Static Budget

Units 100,000 80,000

Sales dollars $200,000 $160,000

Variable costs 120,000 96,000

Fixed costs 40,000 40,000

Operating income $ 40,000 $ 24,000

Sales volume variance = $40,000 - $24,000 = $16,000 F

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