The following sales were budgeted for the year: Product A Product B Product C Demand (units) 1,000 2,000 3,000 Selling price $15 $20 $30 Profit per unit $2 $5 $2 Actual sales for the year showed the following results: Product A Product B Product C Units sold 1,100 2,050 2,800 Sales value $17,050 $38,950 $86,800 Profit $3,080 $10,455 $6,160 What is the sales mix variance? $2,292 Adverse $1,845 Favorable $200 Favorable $50 Favorable
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The following sales were budgeted for the year:
|
|
Product A |
Product B |
Product C |
|
Demand (units) |
1,000 |
2,000 |
3,000 |
|
Selling price |
$15 |
$20 |
$30 |
|
Profit per unit |
$2 |
$5 |
$2 |
Actual sales for the year showed the following results:
|
|
Product A |
Product B |
Product C |
|
Units sold |
1,100 |
2,050 |
2,800 |
|
Sales value |
$17,050 |
$38,950 |
$86,800 |
|
Profit |
$3,080 |
$10,455 |
$6,160 |
What is the sales mix variance?
- $2,292 Adverse
- $1,845 Favorable
- $200 Favorable
- $50 Favorable
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