A machine distributor sells two models, basic and deluxe. The following information relates to its master budget. Basic Deluxe Sales (units) 12,000 3,000 Sales price per unit $ 7,000 $ 14,000 Variable costs per unit $ 5,500 $ 10,000 Actual sales were 11,400 basic models and 3,400 deluxe models. The actual sales prices were the same as the budgeted sales prices for both models. What is the sales mix variance for the basic model? $1,760,000. $660,000. $900,000. $240,000. how is the answer 660,000?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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