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 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 price variance. Sales margin mixture variance. Sales margin volume 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.
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 price variance.
- Sales margin mixture variance.
- Sales margin volume variance.
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