Concept explainers
Market-share and market-size variances (continuation of 14-27). Emcee Inc. prepared the budget for 2017 assuming a 20% market share based on total sales in the Midwest region of the United States. The total fruit drinks market was estimated to reach sales of 1.25 million cartons in the region. However actual total sales volume in the western region was 1.5 million cartons.
Calculate the market-share and market-size variances for Emcee Inc. in 2017. (Calculate all variances in terms of contribution margin.) Comment on the results.
14-27 Variance analysis, multiple products. Emcee Inc. manufactures and sells two fruit drinks: Kostor and Limba. Budgeted and actual results for 2017 are as follows:
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Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
- Market-share and market-size variances (continuation of 14-27). Emcee Inc. prepared the budget for 2017 assuming a 20% market share based on total sales in the Midwest region of the United States. The total fruit drinks market was estimated to reach sales of 1.25 million cartons in the region. However, actual total sales volume in the western region was 1.5 million cartons. Required: Calculate the market-share and market-size variances for Emcee Inc. in 2017. (Calculate all variances in terms of contribution margin.) Comment on the results.arrow_forwardAnalysis of sales variances to develop strategies to improve its profit position is an ongoing exercise at Caribbean Productions Ltd. The company produces and sells three products, Date Prune, and Cashella. The following budgeted and actual results were extracted from the company’s records for the month of January 2017: Budgeted Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ Date 1,200,000 600 2,000 950 570,000 Prune 1,040,000 800 1,300 620 496,000 Cashella 600,000 600 1,000 500 300,000 2,840,000 2,000 1,366,000 Actual Results Product Total Sales $ Volume/units Price $ Contribution margin per unit $ Total contribution margin $ Date 1,540,000 700 2,200 1,000…arrow_forward8. GP Variance Analysis with Complete Information Nacho Chips Company prepared the following budgetary information for July 2021: Sales (12,000 units) Cost of Goods Sold Gross Profit In July, actual operations resulted in the production and sale of 13,000 units which were sold for a selling price of P 34 per unit. The unit cost of goods sold increased by P 3. REQUIRED: 1. Overall GP variance 2. Sales price variance 3. Sales volume variance 4. Cost price variance 5. Cost volume variance P 432,000 288.000 P 144,000 9. GP Variance Analysis with Incomplete Information Chix Pesto Company has requested you to determine the cause of the difference between its 2020 and 2021 gross profit based on the following data: 1. Overall GP variance 2. Price factor 3. Cost factor 4. Volume factor 2020 P 200,000 120,000 P 80,000 Sales Cost of Goods Sold Gross Profit No additional data was made available except that unit sales increased by 20% in 2021. REQUIRED: 2021 P 252,000 180,000 P 72,000arrow_forward
- Variance analysis, multiple products. The Robin’s Basket operates a chain of Italian gelato stores. Although the Robin’s Basket charges customers the same price for all avors, production costs vary, depending on the type of ingredients. Budgeted and actual operating data of its Washington, D.C., store for August 2017 are as follows:arrow_forwardVariance analysis, multiple products. The Robin’s Basket operates a chain of Italian gelato stores. Although the Robin’s Basket charges customers the same price for all flavors, production costs vary, depending on the type of ingredients. Budgeted and actual operating data of its Washington, D.C., store for August 2017 are as follows:arrow_forwardTop managers of Cole Industries predicted 2018 sales of 14,600 units of its product at a unit price of $7.00. Actual sales for the year were 14,000 units at $10.50 each. Variable costs were budgeted at $2.60 per unit, and actual variable costs were $2.70 per unit. Actual fixed costs of $43,000 exceeded budgeted fixed costs by $4,500. Prepare Cole's flexible budget performance report. What variance contributed most to the year's favorable results? What caused this variance? Prepare a flexible budget performance report for the year. First, complete the flexible budget performance report through the contribution margin line, then complete the report through the operating income line. Finally, compute the total variances. (Enter a "0" for any zero balances. For any $0 variances, leave the Favorable (F)/Unfavorable (U) input blank.) Cole Industries Flexible Budget Performance Report For the Year Ended December 31, 2018 1 2 3 4 5…arrow_forward
- Sales Variances Assume that Casio Computer Company, LTD. sells handheld communication devices for $130 during August as a back-to-school special. The normal selling price is $160. The standard variable cost for each device is $80. Sales for August had been budgeted for 600,000 units nationwide; however, due to the slowdown in the economy, sales were only 550,000. Compute the revenue variance, sales price variance, sales volume variance, and net sales volume variance.arrow_forwardHarvest Foods manufactures pumpkin scones. For January 2017, it budgeted to purchase and use 16,500 pounds of pumpkin at $0.87 a pound. Actual purchases and usage for January 2017 were 17,000 pounds at $0.82 a pound. Harvest budgeted for 66,000 pumpkin scones. Actual output was 57,800 pumpkin scones. 1. Compute the flexible-budget variance. 2. Compute the price and efficiency variances. 3. Comment on the results for requirements 1 and 2 and provide a possible explanation for them.arrow_forwardBusiness Solutions's second-quarter 2022 fixed budget performance report for its computer furniture operations follows. The $170,450 budgeted expenses include $120,870 in variable expenses for desks and $14,580 in variable expenses for chairs, as well as $35,000 of fixed expenses. Actual fixed expenses total $36,100. Fixed Budget Actual Results Variances Desk sales (in units) 153 159 54 62 Chair sales (in units) Desk sales Chair sales Total expenses $ 203,490 32,400 170,450 $ 209,880 38,130 178,870 $ 6,390 F 5,730 F 8,420 U Income Required: $ 65,440 $ 69,140 $ 3,700 F Prepare a flexible budget performance report that shows variances between budgeted results and actual results. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. For Quarter Ended June 30 Desk sales Chair sales Variable expenses Contribution margin Fixed expenses Income Answer is complete but not entirely correct. BUSINESS SOLUTIONS Flexible Budget Performance Report Flexible…arrow_forward
- In a recent year a car manufacturer sold 217,044 cars. The company budgeted to sell 226,244 cars during the year. The budgeted sales price for each car was $33,000 and the actual sales price for each car was $33,300. AQ-Actual Quantity SQ-Standard Quantity AP Actual Price SP Standard Price Compute the sales price variance and the sales volume varjance and identify each variance as favorable or unfavorable. Actual Sales Flexible budget Budgeted Salesarrow_forwardPLEASE ANSWER THE FOLLOWING QUESTIONS: Requirements 1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calculate all variances in terms of contribution margin.) Show results for each product in your computations. 2. What inferences can you draw from the variances computed in requirement 1? Data table Budget for 2020 Selling Variable Cost Cartons Product Price per Carton Sold Kostor $11.00 $ Limba $ 23.00 $ 6.40 16.15 Actual for 2020 Selling Variable Cost Cartons Price per Carton Sold 7.40 138,600 16.35 59,400 132,000 $11.60 S 88,000 $ 24.40 $arrow_forwardSunshine Foods manufactures pumpkin scones. For January 2017, it budgeted to purchase and use 14,750 pounds of pumpkin at $0.92 a pound. Actual purchases and usage for January 2017 were 16,000 pounds at $0.85 a pound. Sunshine budgeted for 59,000 pumpkin scones. Actual output was 59,200 pumpkin scones. 1. Compute the flexible-budget variance. 2. Compute the price and efficiency variances. 3. Comment on the results for requirements 1 and 2 and provide a possible explanation for themarrow_forward
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