Question

In: Accounting

A-Zone Media sells two models of e-readers. The budgeted price per unit for the wireless model...

A-Zone Media sells two models of e-readers. The budgeted price per unit for the wireless model is $202 and the budgeted price per unit for the wireless and cellular model is $436. The master budget called for sales of 11,000 wireless models and 3,000 wireless and cellular models during the current year. Actual results showed sales of 8,500 wireless models, with a price of $250 per unit, and 4,600 wireless and cellular models, with a price of $600 per unit. The standard variable cost per unit is $90 for a wireless model and $210 for a wireless and cellular model.

Required:

a. Compute the activity variance for these data. (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.)

b. Compute the mix and quantity variance for these data. (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

budgeted actual
price units total price units total
wireless 202 11000 2222000 250 8500 2125000
wireless and Cellular 436 3500 1526000 600 4600 2760000
14500 3748000 13100 4885000

a. activity variance = (4885000-3748000) = 1137000 F

b. Quantity variance

Wireless (8500-11000) = 2500 U

Wireless and Cellular (4600-3500) = 1100F

total activity variance = 1400 U

Mix variance

Price Variable cost Contribution
wireless 202 90 112
wireless and Cellular 436 210 226
budgeted actual
units sales mix (units/total) units sales mix (units/total)
wireless 11000 76% 8500 65%
wireless and Cellular 3500 24% 4600 35%
14500 13100

mixed variance =

(actual units sold * (actual sales mix% - budgeted sales mix %) * budgeted contribution margin per unit).

wireless = 8500*(65-76)*112 = 10472000 U

wireless and cellular = 4600*(35-24)*226 = 11435600 F

If you find this useful, please click on thumbs up.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

A-Zone Media sells two models of e-readers. The budgeted price per unit for the wireless model...
A-Zone Media sells two models of e-readers. The budgeted price per unit for the wireless model is $202 and the budgeted price per unit for the wireless and cellular model is $436. The master budget called for sales of 11,000 wireless models and 3,000 wireless and cellular models during the current year. Actual results showed sales of 8,500 wireless models, with a price of $250 per unit, and 4,600 wireless and cellular models, with a price of $600 per unit....
Kansas Instruments manufactures two models of pocket calculators. Per unit of the Basic model sells for...
Kansas Instruments manufactures two models of pocket calculators. Per unit of the Basic model sells for $5.50, has direct material cost of $1.25 and requires 0.25 hours of labour to produce. Each calculator of the Scientist model sells for $7.50, has direct material cost of $1.63 and takes 0.375 hours to produce. Each labour hour costs Kansas Instruments $6 and labour is currently very scarce, even though the demand for the company’s calculators is very high. The company is currently...
Corvi Corporation produces and sells one product. The budgeted selling price per unit is $126. Budgeted...
Corvi Corporation produces and sells one product. The budgeted selling price per unit is $126. Budgeted unit sales are shown below:   July August September October Budgeted unit sales 7,300 11,500 14,200 12,100   All sales are on credit with 40% collected in the month of the sale and 60% in the following month. The expected cash collections for August is closest to: Multiple Choice $551,880 $1,131,480 $919,800 $579,600
Jeanclaude Corporation produces and sells one product. The budgeted selling price per unit is $105.
Jeanclaude Corporation produces and sells one product. The budgeted selling price per unit is $105. Budgeted unit sales for July, August, September, and October are 7,400, 7,500, 13,800, and 15,300 units, respectively. All sales are on credit. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month. The budgeted accounts receivable balance at the end of August is closest to: A) $525,000 B) S315,000 C) $472,500 D) $787,500
The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and...
The budgeted selling price per unit is $60. Budgeted unit sales for June, July, August, and September are 8,900, 20,000, 22,000, and 23,000 units, respectively. All sales are on credit. Forty percent of credit sales are collected in the month of the sale and 60% in the following month. The ending finished goods inventory equals 20% of the following month’s unit sales. The ending raw materials inventory equals 10% of the following month’s raw materials production needs. Each unit of...
25) A company sells two products with information as​ follows: A B Sales price per unit...
25) A company sells two products with information as​ follows: A B Sales price per unit $12 $28 Variable cost per unit $10 $12 The products are machine made. Four units of product A can be made with one machine hour and two units of product B can be made with one machine hour. The company has a maximum of 5,000 machine hours available per month. The company can sell up to 18,000 units of product A per​ month, and...
Sells price per unit=$200 variable manufacturing costs per unit= $50 variable S&A costs per unit= $10...
Sells price per unit=$200 variable manufacturing costs per unit= $50 variable S&A costs per unit= $10 Fixed MOH= $50,000 Fixed S&A costs=$10,000 Units produced=5000 Units sold= 4000 Produce a full absorption income statement, what is the operating income produce a variable costing income statement, what is the operating income if units produced exceeds untis sold, does full absorption accounting or varible cost account result in a higher operating income
Consider the following two models: Model 1:  E(y) = β0 + β1x1 + β2x2 + β3x3 Model...
Consider the following two models: Model 1:  E(y) = β0 + β1x1 + β2x2 + β3x3 Model 2:  E(y) = β0 + β1x1 Give the null hypothesis for comparing the two models with a best subset (or partial) F-test. H0: β1 = β2 = β3   H0: β2 = β3 = 0   H0: β1 = 0 Let x1 represent a quantitative independent variable and x2 represent a dummy variable for a 2-level qualitative independent variable. Which of the following models is the equation...
A company sells Gizmos to consumers at a price of $117 per unit. The cost to...
A company sells Gizmos to consumers at a price of $117 per unit. The cost to produce Gizmos is $27 per unit. The company will sell 15,000 Gizmos to consumers each year. The fixed costs incurred each year will be $190,000. There is an initial investment to produce the goods of $3,400,000 which will be depreciated straight line over the 10 year life of the investment to a salvage value of $0. The opportunity cost of capital is 6% and...
A firm sells Gizmos to consumers at a price of $87 per unit. The costs to...
A firm sells Gizmos to consumers at a price of $87 per unit. The costs to produce Gizmos is $30 per unit. The company will sell 14,000 Gizmos to consumers each year. The fixed costs incurred each year will be $140,000. There is an initial investment to produce the goods of $2,400,000 which will be depreciated straight line over 5 year life of the investment to a salvage value of $0. The opportunity cost of capital is 9% and the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT