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14-34(Cont’d.)

Solution Exhibit 14-34

Columnar Presentation of Sales-Volume, Sales-Quantity, and Sales-Mix Variances

for Debbie's Delight Inc.

Flexible Budget:

Actual Pounds of

All Cookies Sold

× Actual Sales Mix

× Budgeted Contribution Margin per Pound

(1)

Actual Pounds of

All Cookies Sold

× Budgeted Sales Mix

× Budgeted Contribution Margin per Pound

(2)

Static Budget:

Budgeted Pounds of

All Cookies Sold

× Budgeted Sales Mix

× Budgeted Contribution Margin per Pound

(3)

Panel A:

Chocolate Chip

(120,000 × 0.48a) × $2

57,600 × $2

(120,000 × 0.45b) × $2

54,000 × $2

(100,000 × 0.45b) × $2

45,000 × $2

$115,200$108,000$90,000

$25,200 F

Sales-volume variance

$7,200 F

Sales-mix variance

$18,000 F

Sales-quantity variance

Panel B:

Oatmeal Raisin

(120,000 × 0.15c) × $2.30

18,000 × $2.30

(120,000 × 0.25d) × $2.30

30,000 × $2.30

(100,000 × 0.25d) × $2.30

25,000 × $2.30

$41,400$69,000$57,500

$27,600 U

Sales-mix variance

$11,500 F

Sales-quantity variance

$16,100 U

Sales-volume variance

Panel C:

Coconut

(120,000 × 0.08e) × $2.60

9,600 × $2.60

(120,000 × 0.10f) × $2.60

12,000 × $2.60

(100,000 × 0.10f) × $2.60

10,000 × $2.60

$24,960$31,200$26,000

$5,200 F

Sales-quantity variance

$6,240 U

Sales-mix variance

$1,040 U

Sales-volume variance

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

Actual Sales Mix:

aChocolate Chip=57,600 ÷ 120,000=48%

cOatmeal Raisin=18,000 ÷ 120,000=15%

eCoconut=  9,600 ÷ 120,000=8%

Budgeted Sales Mix:

bChocolate Chip=  45,000 ÷ 100,000=45%

dOatmeal Raisin=  25,000 ÷ 100,000=25%

f Coconut=  10,000 ÷ 100,000=10%

14-46

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