Question

In September, Larson Inc. sold 40,000 units of its only product for $240,000 and incurred a...

In September, Larson Inc. sold 40,000 units of its only product for $240,000 and incurred a total cost of $225,000, of which $25,000 is fixed costs. The flexible budget for September showed total sales of $300,000. Among variances of the period were: total variable cost flexible-budget variance, $8,000U; total flexible-budget variance, $63,000U; and, sales volume variance, in terms of contribution margin, $27,000U.

The total sales revenue in the master budget for September was?

The total number of budgeted units reflected in the master budget for September was?

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Answer #1
Actual Flexible budget Master
Units 40000 40000 50000 Units
Sales 240000 60000 U 300000 75000 U 375000
Variable cost 200000 8000 U 192000 48000 F 240000
Contribution margin 40000 68000 U 108000 27000 U 135000
Fixed cost 25000 5000 F 30000 0 30000
Net income 15000 63000 U 78000 27000 U 105000

So total sales revenue = 135000*300000/108000 = 375000

Sales price per unit = 300000/40000= 7.5

As per master budget sales units = 375000/7.5 = 50000 units

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