Question

In: Accounting

Question 1 Clean-It-Up manufactures industrial dryers and washers. The following information is available for February: Dryers...

Question 1

Clean-It-Up manufactures industrial dryers and washers. The following information is available for February:

Dryers

Washers

Budgeted units sold

10,000

40,000

Actual sales (in units)

8,820

33,180

Actual selling price per unit

$700

$900

Budgeted selling price per unit

$710

$930

Budgeted market share

20%

25%

Actual market share

25%

24%

Budget cont. margin /unit

$275

$375

REQUIRED:

  1. Determine the sales-mix and sales-quantity variances.
  2. Determine the market-share and market-size variances.
  3. Discuss the potential causes of variance.

Solutions

Expert Solution

a Sales Mix Variance
Actual units sold*(Actual Mix-Budgeted Mix)*Budgeted Contribution per unit
42000*(.21-.2)*275 115500 F
42000*(.79-.8)*375 157500 U
420000 U
Sales Qty Variance
(Actual unit sold-Budgeted Unit Sold)*Budgeted Mix*Budgeted Contribution per unit
(42000-50000)*.2*275 440000 U
(42000-50000)*.8*375 2400000 U
2840000 U
b Market Size Variance
(Actual Market Size-Budgeted Market Size)*Budget Market Share*Budgeted Contribution
(35280-50000)*.2*275 809600 U
(138250-160000)*.25*375 2039063 U
2848663 U
Market share Variance
Actual Market Size *(Actual Market Share-Budgeted Market Share)*Budgeted Contribution per unit
35280(.25-.2)*275 485100 F
138250(.24-.25)*375 518438 U
33338 U
c Causes of Variance
1 Less Exp on Advertisement
2 Demand of the product gets reduced
3 Sometimes there is a change in Technology

ekkarill92 answered 6 months ago
Next > < Previous

Related Solutions

Clean Cloths manufactures Washer and Dryers. The company produces the 5,000 drums used in its washers...
Clean Cloths manufactures Washer and Dryers. The company produces the 5,000 drums used in its washers annually. The unit cost of making a drum is computed as follows: Direct materials $55.00 Direct labor $25.00 Variable manufacturing overhead $10.00 Fixed manufacturing overhead allocated ($100,000) $20.00 Total $110.00 An outside supplier has offered to supply all the drums for washers needed by Clean Cloths for $95.00. If Clean Cloths accepts the supplier offer $10 in direct materials and $5 in direct labor...
Karen Noonan opened Clean Sweep Inc. on February 1, 2019. During February, the following transactions were...
Karen Noonan opened Clean Sweep Inc. on February 1, 2019. During February, the following transactions were completed. Feb. 1 Issued 5,000 shares of Clean Sweep common stock for $13,000. Each share has a $1.50 par. 1 Borrowed $8,000 on a 2-year, 6% note payable. 1 Paid $9,020 to purchase used floor and window cleaning equipment from a company going out of business ($4,820 was for the floor equipment and $4,200 for the window equipment). 1 Paid $220 for February Internet...
Sparky Corporation uses the FIFO method of process costing. The following information is available for February...
Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 25,000 units, 100% complete as to materials and 55% complete as to conversion. Units started and completed: 110,000. Units completed and transferred out: 135,000. Ending Inventory: 30,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $43,000. Costs in beginning Work in Process -...
Transactions to journalize: Karen Noonan opened Clean Sweep Inc. on February 1, 2019. During February, the...
Transactions to journalize: Karen Noonan opened Clean Sweep Inc. on February 1, 2019. During February, the following transactions were completed. Feb. 1 Issued 5,000 shares of Clean Sweep common stock for $13,000. Each share has a $1.50 par. 1 Borrowed $8,000 on a 2-year, 6% note payable. 1 Paid $9,020 to purchase used floor and window cleaning equipment from a company going out of business ($4,820 was for the floor equipment and $4,200 for the window equipment). 1 Paid $220...
Question 1 The following balance sheet information is available (amounts in $ thousands and duration in...
Question 1 The following balance sheet information is available (amounts in $ thousands and duration in years) for a financial institution Amount Duration T-bills 90 0.5 T-notes 55 0.9 T-bonds 176 To be calculated Loans 2724 7 Deposits 2092 1 Federal Funds 238 0.01 Equity 715 Treasury bonds are 5-year maturities paying 6% semiannually and selling at par What is the duration of the T-Bond portfolio? What is the average duration of all the assets? What is the average duration...
Sparky Corporation uses the weighted-average method of process costing. The following information is available for February...
Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 46,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 150,000. Units completed and transferred out: 196,000. Ending Inventory: 40,000 units, 100% complete as to materials and 25% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $63,000. Costs in beginning Work in Process -...
Andrews Corporation uses the weighted-average method of process costing. The following information is available for February...
Andrews Corporation uses the weighted-average method of process costing. The following information is available for February in its Polishing Department: Equivalent units of production—direct materials 102,000 EUP Equivalent units of production—conversion 88,000 EUP Costs in beginning Work in Process—direct materials $ 54,800 Costs in beginning Work in Process—conversion $ 40,300 Costs incurred in February—direct materials $ 463,500 Costs incurred in February—conversion $ 582,200 The cost per equivalent unit of production for direct materials is: part b During November, the production...
Sparky Corporation uses the weighted-average method of process costing. The following information is available for February...
Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 46,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 150,000. Units completed and transferred out: 196,000. Ending Inventory: 40,000 units, 100% complete as to materials and 25% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $63,000. Costs in beginning Work in Process -...
Question 7 The following information is available for Skysong Corporation for 2020. 1. Depreciation reported on...
Question 7 The following information is available for Skysong Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $9,600. 3. Rent collected in advance on January 1, 2020, totaled $59,700 for a 3-year period. Of this amount, $39,800 was reported as unearned at December 31, 2020, for book purposes. 4....
Question 7 The following information is available for Skysong Corporation for 2020. 1. Depreciation reported on...
Question 7 The following information is available for Skysong Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $9,600. 3. Rent collected in advance on January 1, 2020, totaled $59,700 for a 3-year period. Of this amount, $39,800 was reported as unearned at December 31, 2020, for book purposes. 4....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT