Question

The master budget at Western Company last period called for sales of 225,000 units at $9 each. The costs were estimated to be $3.75 variable per unit and $225,000 fixed. During the period, actual production and actual sales were 230,000 units. The selling price was $9.10 per unit. Variable costs were $4.50 per unit. Actual fixed costs were $225,000.
  

Required:

Prepare a sales activity variance analysis. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

Flexible Budget    Sales Activity Variance Master Budget

Sales Revenue:

Less, Variable Costs:

Contribution Margin:

Less, Fixed Costs:

Operating Profits:

Answer 1

1. Sales value variance

2. Sales Value Price Variance

3. Sales value volume variance

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