Answer:
$326,400 is the variable cost quantity factor while $56,000 is the unit cost factor
Explanation:
The variable cost quantity factor is a measure of the difference between the planned and actual units multiplied by planned variable cost.
That is Variable Cost quantity factor = (planned units - actual units sold) x planned variable cost
= (14000-2400) - 14000) x $136
= (11600 - 14000) x $136
= -$326,400
Unit Cost factor = $(140 - 136) x 14000 units
=$56,000
Answer: $326,000, $56,000
Explanation:
Given the following ;
Actual variable cost = $140
Planned variable cost = $136
Actual total units = 14000
Unit increase = 2000
Therefore, the total planned unit is given by;
Actual total unit - unit increase
14000 - 2400 = 11,600 unit
A. Variable cost quantity factor is given by;
Unit increase × planned variable cost
(11600 - 14000) × $136
-2400 × $136 = 326,000
B. Unit cost factor for variable cost of goods sold is given by;
(planned variable cost - actual variable cost) × actual total units
($136 - $140) × 14000
$4 × 14000 = $56,000
