Question
In: Accounting
Lake Cellars produces and sells white wine. The following data concern the three varietals of white...
Lake Cellars produces and sells white wine. The following data concern the three varietals of white wine the company currently offers. Sales data for August are given below:
| Sauvignon Blanc | Chardonnay | Riesling | Total | |||||||||||
| Budgeted selling price | $ | 10.45 | $ | 11.70 | $ | 8.40 | ||||||||
| Budgeted variable cost | $ | 7.65 | $ | 9.20 | $ | 6.00 | ||||||||
| Budgeted selling quantity | 19,500 | 7,700 | 12,300 | 39,500 | ||||||||||
| Actual selling price | $ | 10.55 | $ | 6.55 | $ | 8.55 | ||||||||
| Actual variable cost | $ | 7.25 | $ | 9.05 | $ | 6.50 | ||||||||
| Actual selling quantity | 20,700 | 7,800 | 12,200 | 40,700 | ||||||||||
Required:
a. Compute the sales price variance for all three wines. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
b. Compute the activity variance for Lake Cellars for August. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
c. Compute the mix and quantity variances for Lake Cellars for August. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
Solutions
Expert Solution
For any queries please comment, I have doubt in Activity Variance, rest all are correct.
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ekkarill92 answered 1 year agoRelated Solutions
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