SAS co. operates a marginal costing system and sells two products Handbags (H) and Perfumes (P). The standard contribution per unit for each product and the budgeted levels of production and sales for each product for the last period are as follows: Product H P Standard contribution per unit £30 £55 Budgeted production and sales (units) 2500 1250 The actual contribution per unit for each product and the actual levels of production and sales for each product for the last period are as follows: Product H P Actual contribution per unit £35 £60 Actual production and sales (units) 3000 1000 Required: Calculate the following variances for the last period: 1) sales mix contribution variance 2) sales quantity contribution variance
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.
SAS co. operates a marginal costing system and sells two products Handbags (H) and Perfumes (P). The standard contribution per unit for each product and the budgeted levels of production and sales for each product for the last period are as follows: Product H P Standard contribution per unit £30 £55 Budgeted production and sales (units) 2500 1250 The actual contribution per unit for each product and the actual levels of production and sales for each product for the last period are as follows: Product H P Actual contribution per unit £35 £60 Actual production and sales (units) 3000 1000
Required: Calculate the following variances for the last period: 1) sales mix contribution variance 2) sales quantity contribution variance
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