Scandia Scandia produces a product with three different levels of quality (deluxe, standard and basic). The budget for October showed the following; Deluxe Standard Basic Selling price (£) 10 6 4 Variable costs (£) 5 4 3 Sales volume 3,000 6,000 1,000 Actual results were: Deluxe Standard Basic Selling price (£) 9 7 4 Variable costs (£) 5 4 3 Sales volume 4,000 6,500 500 Calculate the individual sales price variances and sales volume variances and then split the volume variances into a sales mix and quantity 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.
Scandia
Scandia produces a product with three different levels of quality (deluxe, standard and basic).
The budget for October showed the following;
|
|
Deluxe |
Standard |
Basic |
|
Selling price (£) |
10 |
6 |
4 |
|
Variable costs (£) |
5 |
4 |
3 |
|
Sales volume |
3,000 |
6,000 |
1,000 |
Actual results were:
|
|
Deluxe |
Standard |
Basic |
|
Selling price (£) |
9 |
7 |
4 |
|
Variable costs (£) |
5 |
4 |
3 |
|
Sales volume |
4,000 |
6,500 |
500 |
Calculate the individual sales price variances and sales volume variances and then split the volume variances into a sales mix and quantity variance.
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