Question

ses. To follow is the company's performance report in contribution margin format for August: Data Table The Outrageous Balloon Company Actual vs. Budget Performance Report For the Month Ended August 31 Master Budget Master Budget Variance Actual Sales volume (number of cases sold) Sales revenue 60,000 57,000 Less: Variable expenses Contribution margin 217,800 $ 124,500 93,300 $ 66,200 193,800 114,000 79,800 65,000 Less: Fixed expenses Operating income $ 27,100 $ 14.800

Answer 1

Answer to part 1) Budgeted sales price per unit is $3.4 as calculated below.

Budgeted Sales volume = 57,000 cases / units (A)

Budgeted Sales revenue for the above sales volume = 193,800 (B)

Hence, Budgeted sales per unit = B/A = 193.800/57,000 = $3.4 per unit

Answer to part 2) Budgeted variable expense per unit is $2 as calculated below.

Budgeted Sales volume = 57,000 cases / units (A)

Budgeted variable expense for the above sales volume = 114,000 (B)

Hence, Budgeted variable expense per unit = B/A = 114,000/57000 = $2 per unit

Answer to part 3) Budgeted fixed costs for the period is given in the question and it is $65,000 for the month ended on 31 August.

Answer to part 4)

	Actual	Budget	Variance	F/U
Sales Valume	60,000	57,000	3,000	F
Sales revenue	$ 2,17,800	$ 1,93,800	$ 24,000	F
Variable cost	$ 1,24,500	$ 1,14,000	$ -10,500	U
Contribution margin	$ 93,300	$ 79,800	$ 13,500
Fixed expenses	$ 66,200	$ 65,000	$ -1,200	U
Operating income	$ 27,100	$ 14,800	$ 12,300