The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230.000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000. Required: Prepare a sales activity variance analysis. (Indicate the effect of each variance by selecting "P for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230.000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000. Required: Prepare a sales activity variance analysis. (Indicate the effect of each variance by selecting "P for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Prepare a sales activity variance analysis . (Indicate the effect of each variance by selecting “F” for favorable, or “U” for unfavorable. If there is not effect, do not select either option.)
Transcribed Image Text:The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75
variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was
$9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000.
Required:
Prepare a sales activity variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable.
If there is no effect, do not select either option.)
WESTERN COMPANY
Sales Activity Variance
Flexible Budget Sales Activity Variance
Master Budget
Sales revenue
Less
Variable costs
Contribution margin
Less
Foxed costs
Operat ng profits
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