Question

TASK 3 - PC 4.3 Calculate sales mix and quantity variances

Ghaya LLC a producer of personal hygiene items for medical facilities has the following information relating to its sales:

	Units	Price
Actual Product A	14,900	6.20
Actual Product B	7,800	12.10
Actual	22,700
Budgeted Product A	13,000	5.90
Budgeted Product B	7,000	10.50
Budgeted	20,000

Required: Use the Actual and Budgeted Information to answer the following:

a)Calculate the Budgeted Product “A” Sales Mix in Percentage

b)Calculate the Budgeted Product “B” Sales Mix in Percentage

c)Calculate the Product “A” Actual Sales X Budgeted Mix

d)Calculate the Product “B” Actual Sales X Budgeted Mix

e)Calculate the Sales Mix Variance
Sales mix variance (SMV) = (Actual Sales - Actual Sales at budgeted mix) x Budgeted price.

f)Calculate the Sales Quantity Variance
Sales quantity variance = (Actual volume at budgeted mix - Budgeted volume) x Budgeted price

Answer 1

A & B
	Product A	Product B	Total
Budgeted sales (units)	13,000	7,000	20,000
Sales mix (units)
Product A	65.00%
Product B		35.00%
Budgeted sales (units)	13,000	7,000	20,000
S.P	5.90	10.50
Budgeted sales (values)	76,700	73,500	1,50,200
Sales mix (values)
Product A	51.07%
Product B		48.93%
C & D
	Product A	Product B	Total
Actual sales (units)	14,900	7,800	22,700
Sales mix (units)
Product A	65.64%
Product B		34.36%
Actual sales (units)	14,900	7,800	22,700
S.P	6.20	12.10
Actual sales (values)	92,380	94,380	1,86,760
Sales mix (values)
Product A	49.46%
Product B		50.54%
E
Sales mix variance	(Actual Sales - Actual Sales at budgeted mix) x Budgeted price
Product A	(14900*6.20-186760*51.07%) *5.90
Product B	(7800*12.10-186760*48.93%) *10.50
Sales mix variance
Product A	-17,690.16	Unfavourable
Product B	31,482.49	Favourable
Sales mix variance (total)	13,792.33	Favourable
F
Sales mix variance	(Actual volume at budgeted mix - Budgeted volume) x Budgeted price
Product A	(22700*65%-13000) *5.90
Product B	(22700*35%-7000)*10.50
Sales mix variance
Product A	10,354.50	Favourable
Product B	9,922.50	Favourable
Sales mix variance (total)	20,277.00	Favourable

Please Like the solution if satisfied with the answer and if any query please mention it in comments...thanks