The master budget for Lily's Bakery assumes that the bakery will sell 1,000 wedding cakes during 2019.

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The master budget for Lily's Bakery assumes that the bakery will sell 1,000 wedding cakes during 2019. However, Lily had a banner year and actually sold 1,400 wedding cakes.

Lily's master budget figures are as follows:

Sales (in units)1,000 cakes

Sales ($)$300,000

Variable Costs$200,000

Fixed Costs$15,000

To assess the sales activity variance for the bakery, Lily prepares a flexible budget.

Assuming that fixed costs are the same for the master budget and the flexible budget, what is the sales activity variance for sales revenue and is it favorable or unfavorable?

Posted Date: May 11, 2024 01:01 AM

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The master budget for Lily's Bakery assumes that the bakery will sell 1,000 wedding cakes during 2019.

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Expert Answer:

To calculate the sales activity variance for sales revenue we first need to determine the flexible b... View the full answer

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