AF 363 Fall 2017 Midterm 3 Part 2 e total Bexible-budget variance is A $400 Bloc

Question

AF 363 Fall 2017 Midterm 3 Part 2 e total Bexible-budget variance is A $400 Blocher Difficulty Hard Lea Winston Co. had two products code named X and Y. The frm had the following budget for August Product X Product Y Total Sales $286,0001 520,00 $806,000 Varlable Costs Contribution Margin Fixed Costs Operating Income Selling Price per unit 189.80028040820 $96,200! $3016001 $397800 50000 108.000158.000 $46,200$193,60D $239800 $110.00 $5000 On September 1, the following actual operating results for August were reported Variable Costs Contribution Margin Flxed Costs Operating Income Units Sold Product X Product Y Total 360,000$540,000 $900000 500026010 $165,000! s324,0001 $489,000 0158.000 115000$216,000$331000 50.000 3,000 9,000 Total industry volume for both products X and Y was estimated to be 130,000 units et the time of the budget. Actual industry volume for the The sales quantity variance for Product X is: period for products X and Y was 100,000 units O $45,350 favorable. $7,400 unfavorable. $6.500 favorable.

Explanation / Answer

Total units: Budget = ($286,000/$110) 2,600 + ($520,000/$50) 10,400 = 13,000

Actual = 3,000 + 9,000 = 12,000

Budgeted sales mix = 2,600/13,000 = 0.20

(12,000 - 13,000) x 0.20 x $37 = $7,400 unfavourable  

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