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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

× Actual Sales Mix

× Budgeted Contribution Margin per Pound

(1)

Actual Pounds of

× Budgeted Sales Mix

× Budgeted Contribution Margin per Pound

(2)

Static Budget:

Budgeted Pounds of

× 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:

(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

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

Actual Sales Mix:

gWhite Chocolate=13,200 ÷ 120,000=11%

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

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

Budgeted Sales Mix:

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

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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