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The following information is available for the Gabriel Products Company for the month of July:   Static...

The following information is available for the Gabriel Products Company for the month of July:

  Static Budget     Actual

Units                                                                   5,000                          5,100

Sales revenue                                                   $60,000                       $58,650

Variable manufacturing costs                          $15,000                       $16,320

Fixed manufacturing costs                               $18,000                       $17,000

Variable marketing and administrative expense $10,000 $10,500

Fixed marketing and administrative expense   $12,000                       $11,000

The total sales-volume for operating income for the month of July would be

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Answer #1

ANSWER

Formala to be used is

Deals volume fluctuation for working salary

= (Actual units - static spending units) * (Static commitment edge per unit)

  • Static commitment edge per unit = (Sales - Variable manufacturing costs - variable marketing and administrative costs)/units

= ($60,000 - $15,000 - $10,000)/5,000

= $35,000/5,000

= $7 per unit

  • Deals - volume difference for working pay

= (5,100 - 5,000) * $7

= $700 ideal (favouriable)

Deals - volune difference for working pay is good in light of the fact that real deals is more than static spending deals.

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