Problem 16-54 Sales Activity Variance (LO 16-3)

The results for July for Brahms & Sons follow:

	Actual (based on actual sales of 55,000 units)						Master Budget (based on budgeted sales 50,000 units)
Sales revenue		$	465,000					$	575,000
Less
Variable costs
Direct material			60,300						63,000
Direct labor			56,100						79,000
Variable overhead			64,900						79,000
Marketing			21,900						35,000
Administrative			20,300						35,000
Total variable costs		$	223,500					$	291,000
Contribution margin		$	241,500					$	284,000
Less
Fixed costs
Manufacturing			103,900						103,000
Marketing			24,300						35,000
Administrative			82,700						95,000
Total fixed costs		$	210,900					$	233,000
Operating profits		$	30,600					$	51,000

Required:

Prepare a sales activity variance analysis for Brahms & Sons. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

BRAHMS & SONS
Sales Activity Variance
	Flexible Budget (based on actual units)	Sales Activity Variance		Master Budget (based on budgeted sales of 50,000 units)
Sales revenue				$575,000
Less variable costs:
Manufacturing costs:
Direct material				63,000
Direct labor				79,000
Variable overhead				79,000
Marketing				35,000
Administration				35,000
Total variable costs				$291,000
Contribution margin				$284,000
Less fixed costs:
Manufacturing				103,000
Marketing				35,000
Administration				95,000
Total fixed costs				$233,000
Operating profits				$51,000