(Appendix 10C)Yukon Company Expressed the Total Expenses (Y)component of Its

question 123

Essay

(Appendix 10C)Yukon Company expressed the total expenses (Y)component of its master budget for March with the cost formula Y = $100,000 + $40 * X,where X represents the expected number of units of its only product to be manufactured and sold.The budgeted average selling price per unit was $65 for budgeted sales volume 5,000 units based on an estimated industry volume of 50,000 units.Reported actual results for February were as follows:
*Actual industry sales volume was 60,000 units.
Required:
a)Calculate the flexible budget variance and analyze it into sales price variance and cost/expense variance(s).
b)Calculate the sales volume variance and analyze it into market-size (industry volume)variance and market-share variance.
c)On the basis of your analysis in parts (a)and (b),would you recommend a bonus be paid to the sales manager? Why or why not?

---

Definitions:

Price of Hay

The cost at which hay is sold or bought, often influenced by factors such as quality, availability, and demand.

Club Membership

Club membership describes an individual's subscription or affiliation with a private group that offers access to exclusive resources or activities.

Price of Y

The market value or cost assigned to good Y, influenced by factors like supply, demand, and market conditions.

Discount

A reduction from the full price or standard cost of a good or service, often used to stimulate sales or clear inventory.