Yukon company expressed the total expenses (y) component of its master budget for March with the cost
Question:
Yukon company expressed the total expenses (y) component of its master budget for March with the cost formula y = $100,000 + $40*x, where x represents the expected number of units of its only product to be manufactured and sold. The budgeted average selling price per unit was $65 for budgeted sales volume 5,000 units based on an estimated industry volume of 50,000 units. Reported actual results for February were as follows:
*Actual industry sales volume was 60,000 units. Required: ?sales - 5400 units
* Sales revenue - 324,000 less: variable costs - 194,400 contribution margin - 129,600 less fixed expenses - 102,000 operating income - 27,600
a) Calculate the flexible budget variance and analyze it into sales price variance and cost/expense variance(s).
b) Calculate the sales volume variance and analyze it into market-size (industry volume) variance and market-share variance.
c) On the basis of your analysis in parts (a) and (b), would you recommend a bonus be paid to the sales manager? Why or why not?Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins