Determine the sales-volume variance

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Reference no: EM1311873

Calculate Variance Analysis using given data.

Target Company's actual results for the period were:

Sales Volume (in units):	400,000

Sales Revenues	$2,440,000
Variable Costs:
Manufacturing	$1,060,000
Mktg & Admin	748,000	1,808,000
Contribution Margin	632,000
Fixed Costs:
Manufacturing	400,000
Mktg & Admin	200,000	600,000
Operating Profit	32,000

The company originally planned to produce and sell 350,000 at $6 each. At that volume variable manufacturing costs were budgeted at $2.50, and variable marketing and administrative costs were budgeted at $2.00 each. In addition, the company expected an operating profit of $25,000.

A. In tabular format, recreate the master budget and prepare the flexible budget.

B. Calculate the sales-volume variance, sales price variance, and the total fixed cost variance.

Reference no: EM1311873

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