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Tables Chairs
Budgeted units sold 10,000 40,
Budgeted contribution margin per unit $20.00 $25.
Actual units sold 11,000 47,
Actual contribution margin per unit $23.00 $27.
Budget Units sold Sales Mix Actual Units sold
Tables $20.00 10,000 $200,000.00 0.20 Tables $23.00 11, Chairs $25.00 40,000 $1,000,000.00 0.80 Chairs $27.00 47, Total 50,000 1 Total 58,
a.
Tables
=58.000x0,19x20 $220,000.00 or Sales-mix Variance= $12,000.00 U
QaSMbCMb =58.000x0,20x20 $232,000.
Sales-mix Variance Tables= $12,000.00 Unfavorable
Chairs =58.000x0,81x25 $1,175,000.00 or Sales-mix Variance= $15,000.00 F
QaSMbCMb =58.000x0,8x25 $1,160,000.
Sales-mix Variance Chairs= $15,000.00 Favorable
Contribution margin per unit
Contribution Margin
Contribution margin per unit
Flexible Budgeted
Flexible Budgeted
Total sales mix variance= $3,000.00 Favorable or Total sales mix variance= $3,000.00 F
b.
Tables
QaSMbCMb =58.000x0,20x20 $232,000.00 or Sales quantity variance tables= $32,000.
Static Budget =50.000x0,20x20 $200,000.
Sales quantity variance tables= $32,000.00 Favorable
Chairs
QaSMbCMb =58.000x0,8x25 $1,160,000.00 or Sales quantity variance chairs= $160,000.
Static Budget =50.000x0,80x25 $1,000,000.
Sales quantity variance chairs= $160,000.00 Favorable
Total sales quantity variance= 192,000 Favorable or Total sales quantity variance= 192,
c.
=Sales mix variance - Sales quantity variance
Total Sales volume variance $195,000.00^ Favorable^ or^ Sales volume variance Tables= $20,000.
Sales volume variance Chairs= $175,000. Total Sales volume variance= $195,000.
F
F
Favorable
Favorable
Favorable
Favorable
Product
Budget for 2020 Actual for 2020
Selling Price Cartons Sold Selling Price Cartons Sold
Fries $ 7.00 $ 4.00 500,000 $ 8.40 $ 5.50 500,
Burger $ 5.00 $ 3.80 750,000 $ 6.00 $ 3.75 852,
Hotdog $ 6.50 $ 5.75 1,350,000 $ 8.00 $ 5.60 1,530,
Variable Cost per Carton
Variable Cost per Carton
ANSWER
No. 1
Sales-Mix and Sales-Quantity Variance Analysis of Soda King for 2011
Sales Mix Variance Sales-Quantity Variance
Fries $ 1,500,000 $ 162,981 U $ 1,662,981 $ 162,
Burger $ 1,023,000 $ 25,212 F $ 997,788 $ 97,
Hotdog $ 1,147,500 $ 24,988 F $ 1,122,512 $ 110,
Total $ 3,670,500 $ 112,781 U $ 3,783,281 $ 370,
Total Sales Mix Variance $ 112,781 U
Total Sales-Quantity Variance $ 370,781 F
Sales-Volume Variance $ 258,000 F
No. 2
Flexible Budget: Actual Units of All Products Sold * Actual Sales Mix * Budgeted CM Per Unit
**Actual Units of All Products Sold * Budgeted Sales Mix
The breakdown of the favorable sales-volume variance of $258,000 shows that the biggest contributor is the 162, unit increase in sales resulting in a favorable sales-quantity variance of $370,781. There is a partially offsetting unfavorable sales-mix variance of $112,781 in contribution margin.
(6) = (3) x (4)
$ 1,500, $ 900, $ 1,012, $ 3,412,
(6) = (3) x (4)
$ 1,450, $ 1,918, $ 3,672, $ 7,040,
Contribution Margin
Contribution Margin
Actual market share 85,000 : 700,000 0.
Budgeted market share 80,000 : 800,000 0.
Budgeted CM/Unit 34,000,000 : 80,000 425
Market Share Variance 700,000 x (0.12-0.10) x 425
6,375,000 Favorable Actual market share > Budg. market share
Market-size variance (700,000-800,000) x 0.1 x 425
4,250,000 Unfavorable Actual market size < Budgeted market size
Actual market share: Total unit sales : Industry Volume
Budgeted CM/Unit: Budgeted CM Total/ Budgeted Total Unit Sales
