Question

34. Sales volume variance analysis. Budgeted sales and variable costs for Brook Electronics
for the year were as follows:
Total Sales Total Variable Costs
Product X (5,000 units) ....................................................... $ 50,000 $ 20,000
Product Y (200 units).......................................................... 10,000 8,000
Product Z (50,000 units)...................................................... 125,000 75,000
Total Budgeted ............................................................... $185,000 $103,000
Actual sales for the period were as follows:
Product X (5,300 units)............................................................................................... $ 55,650
Product Y (240 units) ................................................................................................. 11,520
Product Z (48,000 units) ............................................................................................. 96,000
Total Actual Sales ................................................................................................... $163,170
Prepare a variance report to show the difference between the master budget and the
?exible budget for each of the three products  

Answer 1

Solution:

Computation Budgeted sale price for Sale and Variable cost
	Product X	Product Y	Product Z
Sales revenue	$50,000.00	$10,000.00	$125,000.00
Variable Costs	$20,000.00	$8,000.00	$75,000.00
Sale Units	5000	200	50000
Sale Price per unit	10	50	2.5
variable cost per unit	4	40	1.5

Variance Report between master budget and flexible budget
	Product X
Particulars	Master Budget	Flexible Budget	Variance
Sales units	5000.00	5300.00
Sales Revenue	$50,000.00	$53,000.00	$3,000.00	Favourable
Variable cost	$20,000.00	$21,200.00	$1,200.00	Unfavourable

Variance Report between master budget and flexible budget
	Product Y
Particulars	Master Budget	Flexible Budget	Variance
Sales units	200.00	240.00
Sales Revenue	$10,000.00	$12,000.00	$2,000.00	Favourable
Variable cost	$8,000.00	$9,600.00	$1,600.00	Unfavourable

Variance Report between master budget and flexible budget
	Product Z
Particulars	Master Budget	Flexible Budget	Variance
Sales units	50000.00	48000.00
Sales Revenue	$125,000.00	$120,000.00	-$5,000.00	Unfavourable
Variable cost	$75,000.00	$72,000.00	-$3,000.00	Favourable