Question

Xerbert Co
Budgeted and Actual Income Statements
For the year Ending December 31
(000s omitted)
	Budgeted				Actual
	Xenox	Xeon	Total		Xenox	Xeon	Total
Units sales	150	100	250		130	130	260
Net Peso sales	P900	P1,000	P1,900		P780	P1,235	P2,015
Variable expenses	450	750	1,200		390	975	1,365
	P450	P   250	P   700		P390	P    260	P 650
Fixed expenses			P   200				P   190
Manufacturing			153				140
Marketing			95				90
Total fixed experience			P   448				P 420
Income before taxes			P   252				P   230

1. The percentage difference between the actual and budgeted breakeven point in units was that actual was

1. 5.00 % above budget.
2. 6.67 % below budget.
3. 6.67 % above budget.
4. 5.00 % below budget.                                                                                        

2. The budgeted total volume of 250,000 units was based upon Xerbert’s achieving a market share of 10%. Actual industry volume was 2,580,000 units. Xerbert increased volume owing to improved market share is

1. 100%
2. 80%
3. 20%
4. 4%                                                                                          

3. The variance of actual contribution margin from budgeted contribution margin attributed to sales price is

1. P155,000unfavorable.
2. P155,000favorable.
3. P65,000favorable.
4. P65,000unfavorable.                                                                                         

4. The variance of actual contribution margin from budgeted contribution margin attributed to unit variable cost changes is

1. P165,000unfavorable.
2. P137,000favorable.
3. P165,000unfavorable.
4. Zero because actual unit variable costs were the same as budgeted unit variable costs.

Answer 1

Q1

1. The percentage difference between the actual and budgeted breakeven point in units was that actual was

Option A : 5.00 % above budget.

	Particulars	Budget	Actual
a	Units	250	260
b	Contribution	700	650
c	Contribution per unit (b/a)	2.8	2.5
d	Fixed Cost	448	420
e	Breakeven In Units (d/c)	160	168
f	Difference in break even point (Budgeted - Acutal)	8
g	Difference in break even point in % (8/160)		5%

The budgeted total volume of 250,000 units was based upon Xerbert’s achieving a market share of 10%. Actual industry volume was 2,580,000 units. Xerbert increased volume owing to improved market share is

Option C -20%

	Particulars	Amount
a	Actual Industry Volume	2580000
b	Sale as per Industry Volume for Xerbert (10% of A)	258000
c	Budgeted Total Volume	250000
d	Actual Sale	260000
e	Company Incresed Market Share (d-b)	2000
f	Difference inActual Sale Vol and Budgeted (d-c)	10000
g	Incresed % in Volume owing to Masket Share (e/f)	20%

3. The variance of actual contribution margin from budgeted contribution margin attributed to sales price is

Option D P65,000unfavorable.    

	Particluars	Xenon	Xeon
a	Budgeted Sales Price per unit	6	10
b	Actual Sale Units	130	130
c	Actual Sale Units * Budgeted Sales Price (a*b)	780	1300
d	Total for Xenon Xeon (780+1300)	2080
e	Actual Sales	2015
f	Variance Unfavourable (d-e)	65

4. The variance of actual contribution margin from budgeted contribution margin attributed to unit variable cost changes is

Option D : Zero because actual unit variable costs were the same as budgeted unit variable costs.

	Particluars	Xenon	Xeon
a	Budgeted Total variable Cost	450	750
b	Budgeted Vol	150	100
c	Budgeted cost per unit (a/b)	3	7.5
d	Actual Volume	130	130
e	Acutal Variable Cost	390	975
f	Acutal Variable Cost per unit (d/e)	3	7.5
	Variance	0	0