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14-34 (Cont’d.)

SOLUTION EXHIBIT 14-34 (Cont’d.)

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 D:

White Chocolate

(120,000 × 0.11g) × $3.00

13,200 × $3.00

(120,000 × 0.05h) × $3.00

6,000 × $3.00

(100,000 × 0.05h) × $3.00

5,000 × $3.00

$39,600$18,000$15,000

$24,600 F

Sales-volume variance

$21,600 F

Sales-mix variance

$3,000 F

Sales-quantity variance

Panel E:

Macadamia Nut

(120,000 × 0.18j) × $3.10

21,600 × $3.10

(120,000 × 0.15k) × $3.10

18,000 × $3.10

(100,000 × 0.15k) × $3.10

15,000 × $3.10

$66,960$55,800$46,500

$11,160 F

Sales-mix variance

$9,300 F

Sales-quantity variance

$20,460 F

Sales-volume variance

Panel F:$288,120l$282,000m$235,000n

$53,120 F

Total sales-volume variance

$47,000 F

Total sales-quantity variance

$6,120 F

Total sales-mix variance

All Cookies

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

Actual Sales Mix:

gWhite Chocolate=13,200 ÷ 120,000=11%

jMacadamia Nut=21,600 ÷ 120,000=18%

l$115,200 + $41,400 + $24,960

                         + $39,600 + $66,960 = $288,120

Budgeted Sales Mix:

hWhite Chocolate=     5,000 ÷ 100,000=5%

kMacadamia Nut=15,000 ÷ 100,000=15%

m$108,000 + $69,000 + $31,200

                       + $18,000 + $55,800 = $282,000

  n$90,000 + $57,500 + $26,000

                           + $15,000 + $46,500 = $235,000

14-47

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