chap.7. Cost

chap.7. Cost - 7-29 1. Actual budget Flexible budget Units...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 7-29 1. Actual budget Flexible budget Units sold 230,550 230,550 Sales volume Static variances budget 10,550 F 220,000 Sales revenue $3,412,140 $3,458,250* 158,250 F $3,300,000 Variable cost $2,320,255 $2,213,280* $101,280 U $2,112,000 Contribution $1,091,885 $1,244,970 $56,970 F $1,188,000 margin *Budgeted selling price per unit= $3,300,000/220,000= $15 per headband. Flexible budget revenues- $15*230,550= $3,458,250 *Budgeted variable cost per unit= $2,112,000/220,000=$9.60 Flexible budget Variable cost= $9.60*230,550= $2,213,280 2. Actual market size* Market Actual market share* Share Budgeted Contribution Variance margin per unit (1) - (2) (1) 4,350,000*5.3%*$5.4 0 $1,244,970 Actual market Market Size size*Budgeted Variance market (2) - (3) share*Budgeted contribution margin per unit (2) 4,350,000*5%*$5.4 0 $1,174,500 $70,470 F Static budget: Budgeted Market size* Budgeted Market share*Budgeted contribution margin per unit (3) 4,400,000*5%*$5. 40 $1,188,000 $13,500 F $56,970 F (Sales-volume Variance) Budgeted Market Share= Budgeted units/ Market size= 220,000/4,400,000= 5% Actual Market Share= Actual Units/ Market size= 230,550/4,350,000= 5.3% Budgeted contribution Margin per unit= $1,188,000/220,000= $5.4 3. The company market share has increased by 0.3% even though the size of maket of headbands has decreased. This could be due to increased efforts in marketing or actions by competitors that are driving more customers to the company. The favorable sales volume has helped offset the decreased market size. It might be due to the lower sales price or a better better quality product. ...
View Full Document

This note was uploaded on 12/12/2011 for the course ACCT 123 taught by Professor Mahajibril during the Fall '11 term at Newman.

Page1 / 2

chap.7. Cost - 7-29 1. Actual budget Flexible budget Units...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online