Jackson, Inc

Multiple Choice

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: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.

If fixed costs are budgeted for $500,000 and are actually $500,000, what is the difference between budgeted and actual operating income?

A) $3,200 favorable.
B) $5,800 favorable.
C) $122,500 unfavorable.
D) $65,550 favorable.
E) $23,455 favorable.