Paris Perfumery Sells Two Perfumes, L'Amour and Plaisir

Multiple Choice

Paris Perfumery sells two perfumes, L'Amour and Plaisir. The expected sales mix is one bottle of L'Amour to five bottles of Plaisir. Planned sales and variable costs for last period were as follows: L'Amour Plaisir Total
Sales (10,000 units) $600,000 (50,000 units) $400,000 $1,000,000
Variable costs 200,000 230,000 430,000
Contribution Margin $400,000 $170,000 $ 570,000
During the period there was an economic downturn. Sales of L'Amour dropped off, so Paris reduced its price. Actual sales were as follows:
L'Amour Plaisir Total
Sales (7,500 @ $45) $337,500 (36,000 @ $8) $288,000 $625,500
Variable costs 165,000 153,000 318,000
Contribution Margin $172,500 $135,000 $307,500
(Appendix 11A) The contribution margin budget variance was:

A) $262,500 U
B) $262,500F
C) $ 0
D) $87,500 U