Pair Company has two products named X and Y. The firm had the following master budget for the year just completed: Product X Product Y Total Sales $ 279,500 $ 379,500 $ 659,000 Variable Costs 167,700 189,750 357,450 Contribution Margin $ 111,800 $ 189,750 $ 301,550 Fixed costs 130,000 108,000 238,000 Operating income (Loss) $ (18,200) $ 81,750 $ 63,550 Selling Price per unit $ 130 $ 60 The following actual operating results were reported after the year was over: Product X Product Y Total Sales $ 135,000 $ 323,000 $ 458,000 Variable Costs 60,750 113,050 173,800 Contribution Margin $ 74,250 $ 209,950 $ 284,200 Fixed costs 140,000 108,000 248,000 Operating income (Loss) $ (65,750) $ 101,950 $ 36,200 Units Sold 1,500 8,500 The contribution margin sales volume variance for Product X is: Multiple Choice $33,800 favorable. $37,800 unfavorable. $47,800 unfavorable. $72,800 favorable. $33,800 unfavorable.
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.
Q17
Pair Company has two products named X and Y. The firm had the following
| Product X | Product Y | Total | |
|---|---|---|---|
| Sales | $ 279,500 | $ 379,500 | $ 659,000 |
| Variable Costs | 167,700 | 189,750 | 357,450 |
| Contribution Margin | $ 111,800 | $ 189,750 | $ 301,550 |
| Fixed costs | 130,000 | 108,000 | 238,000 |
| Operating income (Loss) | $ (18,200) | $ 81,750 | $ 63,550 |
| Selling Price per unit | $ 130 | $ 60 |
The following actual operating results were reported after the year was over:
| Product X | Product Y | Total | |
|---|---|---|---|
| Sales | $ 135,000 | $ 323,000 | $ 458,000 |
| Variable Costs | 60,750 | 113,050 | 173,800 |
| Contribution Margin | $ 74,250 | $ 209,950 | $ 284,200 |
| Fixed costs | 140,000 | 108,000 | 248,000 |
| Operating income (Loss) | $ (65,750) | $ 101,950 | $ 36,200 |
| Units Sold | 1,500 | 8,500 |
The contribution margin sales volume variance for Product X is:
-
$33,800 favorable.
-
$37,800 unfavorable.
-
$47,800 unfavorable.
-
$72,800 favorable.
-
$33,800 unfavorable.
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