Brownstone Products, I need to compute sales volume variance for the month of Ju

Question

Brownstone Products, I need to compute sales volume variance for the month of July in Terms of operating income. Where the actual units are 3,900, actual sales revenue: $54,700, actual variable manufacturing cost is 10,700, actual fixed manufacturing cost is 12,600, actual variable selling and administrative costs are 7,200 and the actual fixed selling and administrative costs are 8,600. The master budget figures are as follows: units: 3,200, sales revenue: $60,000, variable manufacturing costs 16,000, fixed manufacturing costs, 13,400, variable selling and administrative costs, 8,000 and fixed selling and administrative costs 10,250. I need to compute the sales volume variance for the month of July in terms of operating income.

Explanation / Answer

compute the sales volume variance for the month of July in terms of operating income.

So volume variance of operating income is 7875 F

Planning budget Flexible budget Volume variance Activity 3200 3900 Sales 60000 73125 13125 F Variable manufacturing cost 16000 19500 3500 U Fixed manufacturing cost 13400 13400 None Gross profit 30600 40225 9625 F Variable selling and administrative exp 8000 9750 1750 U Fixed selling and administrative expenses 10250 10250 None Operating income 12350 20225 7875 F

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