Detailed Answer
Answer (B) is correct.
For a single product, the sales-volume variance is the change in the
contribution margin attributable solely to the difference between the actual and budgeted unit sales (holding price constant). It can be
calculated as follows: (AQ × SP) – (SQ × SP).
The actual and standard quantities are 24,000 and 28,000, respectively.
The standard price can be calculated by dividing the total budgeted sales
dollars by the budgeted total units to reach $12.50 (350,000 ÷ 28,000).
Thus, the sales-volume variance is equal to $50,000 unfavorable [(24,000
× $12.50) – (28,000 × $12.50)].