Sunshine Goods Ltd is a revenue maximizing firm that engages in the analysis of variances to provide useful information to management. The company manufactures and sells three (3) products, RG, KC and MG. During July 2019 the following budgeted and actual results were presented to you the management accountant for analysis: Budgeted Results
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.
Sunshine Goods Ltd is a revenue maximizing firm that engages in the
Budgeted Results
|
Product |
Total Sales $ |
Volume/units |
Price $ |
Contribution margin per unit $ |
Total contribution margin $ |
|
RG |
585,000 |
900 |
650 |
820 |
738,000 |
|
KC |
500,000 |
500 |
1,000 |
850 |
425,000 |
|
MG |
300,000 |
600 |
500 |
720 |
432,000 |
|
Total |
|
2,000 |
|
|
1,595,000 |
Actual Results
|
Product |
Total Sales $ |
Volume/units |
Price $ |
Contribution margin per unit $ |
Total contribution margin $ |
|
RG |
500,000 |
500 |
1,000 |
800 |
400,000 |
|
KC |
270,000 |
300 |
900 |
`900 |
270,000 |
|
MG |
105,000 |
350 |
300 |
700 |
245,000 |
|
Total |
|
1,150 |
|
|
915,000 |
Required:
- Sales margin quantity variance.
- Total sales margin variance.
- As the management accountant list four (4) measures that you would adopt to have some degree of control over sales revenue.
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