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  • $61,000 F Total Sales-Quantity Variance $9,000 F Total Sales-Mix Variance

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    Elliot Richard
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    This document compares a flexible budget to a static budget for cookie sales. A flexible budget uses actual sales quantities and mix, while a static budget uses budgeted quantities and mix. The flexible budget shows a $558,000 contribution margin for all flavors based on actual sales, while the static budget shows a $488,000 contribution margin. The sales-mix variance and sales-quantity variance resulted in a total $70,000 favorable variance to operating income under the flexible budget approach.

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    WINDANG KA

    Original Title

    Flexible Budget

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    This document compares a flexible budget to a static budget for cookie sales. A flexible budget uses actual sales quantities and mix, while a static budget uses budgeted quantities and mix. The flexible budget shows a $558,000 contribution margin for all flavors based on actual sales, while the static budget shows a $488,000 contribution margin. The sales-mix variance and sales-quantity variance resulted in a total $70,000 favorable variance to operating income under the flexible budget approach.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    8 views1 page

    $61,000 F Total Sales-Quantity Variance $9,000 F Total Sales-Mix Variance

    Uploaded by

    Elliot Richard
    This document compares a flexible budget to a static budget for cookie sales. A flexible budget uses actual sales quantities and mix, while a static budget uses budgeted quantities and mix. The flexible budget shows a $558,000 contribution margin for all flavors based on actual sales, while the static budget shows a $488,000 contribution margin. The sales-mix variance and sales-quantity variance resulted in a total $70,000 favorable variance to operating income under the flexible budget approach.

    Copyright:

    © All Rights Reserved
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    of 1

    Flexible Budget: Static Budget:

    Actual Pints of Actual Pounds of Budgeted Pounds of


    All Flavors Sold All Cookies Sold All Cookies Sold
    × Actual Sales Mix × Budgeted Sales Mix × Budgeted Sales Mix
    × Budgeted × Budgeted × Budgeted
    Contribution Margin Contribution Margin Contribution Margin
    per Pint per Pound per Pound
    (1) (2) (3)
    Panel F: $558,000g $549,000h $488,000j
    All Flavors
    $9,000 F $61,000 F
    Total sales-mix variance Total sales-quantity variance

    $70,000 F
    Total sales-volume variance

    F = favorable effect on operating income; U = unfavorable effect on operating income.

    g$141,750 + $326,250 + $90,000 = h$165,375 + $293,625 + $90,000 =


    $558,000 $549,000
    j$147,000 + $261,000 + $80,000 =
    $488,000

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