The budgeted sales for a company for a period was: Units Units contribution margin Total contribution Product X 8 000 20 160 000 Product Y 7 000 12 84 000 Product Z 5 000 9 45 000 The actual Sales were: Units Units contribution margin Total contribution Product X 6000 20 120 000 Product Y 7 000 12 84 000 Product Z 9 000 9 81 000 Calculate the following: i) Total sales margin variance ii) Sales volume variance iii) Sales margin mix varian
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.
The budgeted sales for a company for a period was:
|
|
Units |
Units contribution margin |
Total contribution |
|
Product X |
8 000 |
20 |
160 000 |
|
Product Y |
7 000 |
12 |
84 000 |
|
Product Z |
5 000 |
9 |
45 000 |
The actual Sales were:
|
|
Units |
Units contribution margin |
Total contribution |
|
Product X |
6000 |
20 |
120 000 |
|
Product Y |
7 000 |
12 |
84 000 |
|
Product Z |
9 000 |
9 |
81 000 |
Calculate the following:
- i) Total sales margin variance
- ii) Sales volume variance
iii) Sales margin mix varian
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