The Following Is a Summarized Master Budget That Winnipeg Company

question 96

Multiple Choice

The following is a summarized master budget that Winnipeg Company prepared for January:
$\begin{array}{|l|r|r|}\hline \text { Sales } & & 9,000 \text { units } \\\hline \text { Sales revenue } & \$ 450,000 \\\hline \text { Less variable costs: } & & \\\hline \text { Manufacturing } & \$ 270,000 & \\\hline \text { Selling and administrative } & \underline{18,000} & \underline{288,000} \\\hline \text { Contribution } & & \$ 162,000 \\\hline \text { Less fixed costs: } & & \\\hline \text { Manufacturing } & 72,000 & \\\hline \text { Selling and administrative } & \underline{27,000} & \underline{99,000} \\\hline \text { Operating income } & & \$ 63,000 \\\hline\end{array}$

$\text { Actual results for January were as follows: }$

$\begin{array}{|l|r|}\hline \text { Units produced and sold } & 8,500 \text { units } \\\hline \text { Selling price per unit } & \$ 55.00 \\\hline \text { Variable costs per unit: } & \\\hline \text { Manufacturing } & \$ 32.00 \\\hline \text { Selling and administrative } & \$ 1.50 \\\hline \text { Total fixed costs } & \$ 99,000\\\hline\end{array}$

-What total sales volume variance did Winnipeg Company report for January?

• A) $3,500 U.
• B) $9,000 U.
• C) $25,000 U.
• D) $27,500 U.

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Definitions:

Management Consulting

An area of public accounting ranging from development of accounting and computer systems to support services for marketing projects and merger and acquisition activities.

Financial Statements

Periodic reports published by a company for the purpose of providing information about its financial status and performance to external parties.

Fairness

The quality of making judgments that are free from discrimination, dishonesty, or injustice.

Statement of Cash Flows

A financial report that consolidates information about all cash received and expended by a business.