Question 1

a. Cottesloe Boogie manufactures boogie boards. The companys performance report for November is as follows:

	Actual	Budget
Boogie boards sold	6000	8000
Sales revenue	$240 000	$300 000
Variable costs	145 000	180 000
Contribution margin	95 000	120 000
Fixed costs	84 000	80 000
Operating profit	$11 000	$40 000

The company uses a flexible budget to analyze its performance and to measure the effect in operating profit of the various factor affecting the difference between budgeted and actual operating profit.

Required:

Calculate the sales price and sales volume variances for November and indicate whether each is favorable or unfavorable.

b. The date below relate to Macquarie Ltd for the month of June:

	Static budget	Actual
Units sold	10 000	9 000
Sales revenue	$120 000	$103 500
Variable manufacturing cost	40 000	36 000
Fixed manufacturing cost	20 000	20 000
Variable selling and administrative expenses	10 000	9 000
Fixed selling and administrative expenses	10 000	10 000

Required:

Calculate the sales price and sales volume variances for June.