Calculate the static-budget variance in units

Reference no: EM132970232

Question: Tsheng Pty Ltd produces the basic fillings used in many popular pies, savoury items and rolls. Tsheng uses standard costing and carries over no inventory from one month to the next. The savoury product group's results for June were:

Performance report June

Actual results

Static budget

Units (litres)

459 000

446000

Revenues

$2 927600

$2 746300

Variable manufacturing costs

1846900

1597432

Contribution margin

$1080700

$1148868

Cindy Crawford, the business manager for savoury products, is pleased that more quantities of pies were sold than budgeted and that revenues were up. Unfortunately, variable manufacturing costs went up too. The bottom line is that contribution margin declined by $68,186, which is just over 2% of the budgeted revenues of $2 746300. Overall, Cindy feels that the business is running fine.

Required

1. Calculate the static-budget variance in units, revenues, variable manufacturing costs and contribution margin. What percentage is each static-budget variance relative to its static-budget amount?

2. Break down each static-budget variance into a flexible-budget variance and a sales-volume variance.

3. Calculate the selling-price variance.

Reference no: EM132970232

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