Question
The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,000 units with revenues of $3,300,000. Total variable
The master budget at Cherrylawn Corporation at the beginning of the year was based on sales of 275,000 units with revenues of $3,300,000. Total variable costs were budgeted at $1,925,000 and fixed costs at $950,000. During the period, actual production and actual sales were 255,000 units. The actual revenues were $3,442,500. Actual variable costs were $6.50 per unit. Actual fixed costs were $980,000. Required: Prepare a sales activity variance analysis. Note: 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.
Cherrylawn Corporation | ||||
Sales Activity Variance | ||||
Flexible Budget | Sales Activity Variance | Master Budget | ||
Sales revenue | ||||
Less: | ||||
Variable costs | ||||
Contribution margin | ||||
Less: | ||||
Fixed costs | ||||
Operating profits |
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