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

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:
$\begin{array}{|l|r|}\hline \text { Sales } & \text { 5,400 units* } \\\hline & \\\hline \text { Sales revenue } & \$ 324,000 \\\hline \text { Less variable costs } & 194,400 \\\hline \text { Contribution margin } & \$ 129,600 \\\hline \text { Less fixed expenses } & 102,000 \\\hline \text { Operating income } & \$ 27,600 \\\hline\end{array}$
*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?