Winston Company had two products code named X and Y. The firm had the following budget for August: Product X Product Y Total Sales $ 293,160 $ 535,000 $ 828,160 Variable Costs 200,326 214,000 414,326 Contribution Margin $ 92,834 $ 321,000 $ 413,834 Fixed costs 50,000 108,000 158,000 Operating Income $ 42,834 $ 213,000 $ 255,834 Selling Price per unit $ 120 $ 50 On September 1, the following actual operating results for August were reported: Product X Product Y Total Sales $ 366,000 $ 546,000 $ 912,000 Variable Costs 202,500 223,500 426,000 Contribution Margin $ 163,500 $ 322,500 $ 486,000 Fixed costs 57,500 115,500 173,000 Operating Income $ 106,000 $ 207,000 $ 313,000 Units Sold 3,150 9,750 Total industry volume for both products X and Y was estimated to be 137,500 units at the time of the budget. Actual industry volume for the period for products X and Y was 106,000 units. The contribution margin sales volume variance for Product X is:
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.
Winston Company had two products code named X and Y. The firm had the following budget for August:
| Product X | Product Y | Total | |
|---|---|---|---|
| Sales | $ 293,160 | $ 535,000 | $ 828,160 |
| Variable Costs | 200,326 | 214,000 | 414,326 |
| Contribution Margin | $ 92,834 | $ 321,000 | $ 413,834 |
| Fixed costs | 50,000 | 108,000 | 158,000 |
| Operating Income | $ 42,834 | $ 213,000 | $ 255,834 |
| Selling Price per unit | $ 120 | $ 50 |
On September 1, the following actual operating results for August were reported:
| Product X | Product Y | Total | |
|---|---|---|---|
| Sales | $ 366,000 | $ 546,000 | $ 912,000 |
| Variable Costs | 202,500 | 223,500 | 426,000 |
| Contribution Margin | $ 163,500 | $ 322,500 | $ 486,000 |
| Fixed costs | 57,500 | 115,500 | 173,000 |
| Operating Income | $ 106,000 | $ 207,000 | $ 313,000 |
| Units Sold | 3,150 | 9,750 |
Total industry volume for both products X and Y was estimated to be 137,500 units at the time of the budget. Actual industry volume for the period for products X and Y was 106,000 units.
The contribution margin sales volume variance for Product X is:
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Winston Company had two products code named X and Y. The firm had the following budget for August:
| Product X | Product Y | Total | |
|---|---|---|---|
| Sales | $ 279,240 | $ 505,000 | $ 784,240 |
| Variable Costs | 197,795 | 202,000 | 399,795 |
| Contribution Margin | $ 81,445 | $ 303,000 | $ 384,445 |
| Fixed costs | 50,000 | 108,000 | 158,000 |
| Operating Income | $ 31,445 | $ 195,000 | $ 226,445 |
| Selling Price per unit | $ 120 | $ 50 |
On September 1, the following actual operating results for August were reported:
| Product X | Product Y | Total | |
|---|---|---|---|
| Sales | $ 362,000 | $ 542,000 | $ 904,000 |
| Variable Costs | 197,500 | 218,500 | 416,000 |
| Contribution Margin | $ 164,500 | $ 323,500 | $ 488,000 |
| Fixed costs | 52,500 | 110,500 | 163,000 |
| Operating Income | $ 112,000 | $ 213,000 | $ 325,000 |
| Units Sold | 3,050 | 9,250 |
Total industry volume for both products X and Y was estimated to be 132,500 units at the time of the budget. Actual industry volume for the period for products X and Y was 102,000 units.
The contribution margin sales volume variance for Product X is:
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