Question
In: Accounting
Margot’s Ice Cream operates several stores in a major metropolitan city and its suburbs. Its budget...
Margot’s Ice Cream operates several stores in a major metropolitan city and its suburbs. Its budget and operating data for the current year follow:
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Required:
1. Compute these variances for the individual flavors and total quantity sold. (Do not round intermediate calculations.)
| a | b | c | |
| Flavor | Sales Volume Variance (Number+ Favorable or Unfavorable) | Sales Mix Variance(Number+ Favorable or Unfavorable) | Sales Quantity Variance(Number+ Favorable or Unfavorable) |
| Vanila | |||
| Chocolate | |||
| Strawberry | |||
| Anchovy | |||
| Total |
Solutions
Expert Solution
| Computation of variance individual flavoured and total guantitysold | ||||||
| a | b | c | ||||
| Flavour | Sales Volume variance (number + favourable or unfavourable) | Sales Mix variance (number + favourable or unfavourable) | Sales Quantity variance (number + favourable or unfavourable) | |||
| Vanila | -42000 Unfavourable | 75600 | -33600 Unfavourable | |||
| Chocolate | -27000 Unfavourable | 81000 | -54000 Unfavourable | |||
| strawberry | 143000 Favourable | -99000 | -44000 Unfavourable | |||
| anchovy | 180000 Favourable | -162000 | -18000 Unfavourable | |||
| Total | 254000 Favourable | -104400 | -149600 Unfavourable | |||
| Notes | ||||||
| 1 | Total sales variance is favarable that is 254000 | |||||
| 2 | ||||||
| 3 | ||||||
| Total sales variance is favarable that is 254000 | ||||||
| Sales volume variance | (Actual Unit Sold - Budgeted Unit Sales) | x (multiply) | Standard Contribution Per Unit ( Sales- Variable cost per unit in $ | Sales volume variance | Favourable or unfavarable | |
| Vanila | .-60000(216000 -276000) | x | 0.7 (1.55-0.85) | -42000 | Unfavourable | |
| Chocolate | .-30000(315000-345000) | x | 0.9(2.1-1.2) | -27000 | Unfavourable | |
| strawberry | 130000(360000-230000) | x | 1.1(2.1-1) | 143000 | Favourable | |
| anchovy | 120000(189000-69000) | x | 1.5(3.1-1.6) | 180000 | Favourable | |
| Total | 254000 | Favourable | ||||
| Sales quantity variance | (Budgeted quantity -Actual quantity budget mix) (1) | x (multiply)(2) | Standard Contribution Per Unit ( Sales- Variable cost per unit in $ (3) | Sales Quantity variance (1) X (3) | Favourable or unfavarable | |
| Vanila | .-48000(276000 -324000) | x | 0.7 (1.55-0.85) | -33600 | Unfavourable | |
| Chocolate | .-60000(345000-405000 | x | 0.9(2.1-1.2) | -54000 | Unfavourable | |
| strawberry | .-40000(230000-270000) | x | 1.1(2.1-1) | -44000 | Unfavourable | |
| anchovy | .-12000(68000-81000) | x | 1.5(3.1-1.6) | -18000 | Unfavourable | |
| Total | -149600 | Unfavourable | ||||
| Working | ||||||
| Actual quantity | Budgeted quantity | Actual quantity at Budget mix | Calculation | |||
| Vanila | 216000 | 276000 | 324000 | .276000/920000 X1080000 | ||
| Chocolate | 315000 | 345000 | 405000 | .345000/920000 X1080000 | ||
| strawberry | 360000 | 230000 | 270000 | .230000/920000 X1080000 | ||
| anchovy | 189000 | 69000 | 81000 | .69000/920000 X1080000 | ||
| Total | 1080000 | 920000 | 1,080,000.00 | |||
| Sales mix variance | ||||||
| Sales Mix variance | (Actual quantity budget mix)- Actual quantity (1) | x (multiply)(2) | Standard Contribution Per Unit ( Sales- Variable cost per unit in $ (3) | Sales Quantity variance (1) X (3) | Favourable or unfavarable | |
| Vanila | 108000(324000-216000) | x | 0.7 (1.55-0.85) | 75600 | favourable | |
| Chocolate | 90000(405000-315000) | x | 0.9(2.1-1.2) | 81000 | favourable | |
| strawberry | .-90000(270000-360000) | x | 1.1(2.1-1) | -99000 | Unfavourable | |
| anchovy | .-108000(81000-189000) | x | 1.5(3.1-1.6) | -162000 | Unfavourable | |
| Total | -104400 | Unfavourable | ||||
| Working | ||||||
| Actual quantity | Budgeted quantity | Actual quantity at Budget mix | Calculation | |||
| Vanila | 216000 | 276000 | 324000 | .276000/920000 X1080000 | ||
| Chocolate | 315000 | 345000 | 405000 | .345000/920000 X1080000 | ||
| strawberry | 360000 | 230000 | 270000 | .230000/920000 X1080000 | ||
| anchovy | 189000 | 69000 | 81000 | .69000/920000 X1080000 | ||
| Total | 1080000 | 920000 | 1,080,000.00 | |||
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