Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 17, Problem 28E
Sales Mix and Quantity Variances
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $35. The a la carte option has a budgeted average price of $24 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $15 and the a la carte option averages $10 per meal in budgeted variable cost. The manager estimates that 2,500 people will order a meal in any month. For July, the restaurant served a total of 2,300 meals, including 950 buffet options. Total revenues were $34,200 for buffet meals and $35,100 for the a la carte meals.
Required
- a. Compute the activity variance for the restaurant for July.
- b. Compute the mix and quantity variances for July.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $52. The a la carte option has a budgeted average price of $41 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $32 and the a la carte option averages $25 per meal in budgeted variable cost. The manager estimates that 2,600 people will order a meal in any month.
For July, the restaurant served a total of 2,400 meals, including 940 buffet options. Total revenues were $49,820 for buffet meals and $62,780 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat
buffet and an a la carte option, where diners can order from the menu. The buffet
option has a budgeted meal price of $50. The a la carte option has a budgeted
average price of $39 for a meal. The restaurant manager expects that 40 percent of its
diners will order the buffet option. The buffet option has a budgeted variable cost of
$30 and the a la carte option averages $23 per meal in budgeted variable cost. The
manager estimates that 2,000 people will order a meal in any month.
For July, the restaurant served a total of 1,800 meals, including 600 buffet options.
Total revenues were $30,600 for buffet meals and $50,400 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
b. Compute the mix and quantity variances for July.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the activity variance for the…
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $48. The a la carte option has a budgeted average price of $37 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $28 and the a la carte option averages $23 per meal in budgeted variable cost. The manager estimates that 2,000 people will order a meal in any month.
For July, the restaurant served a total of 1,800 meals, including 700 buffet options. Total revenues were $34,300 for buffet meals and $41,800 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
b. Compute the mix and quantity variances for July.
Chapter 17 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 17 - What complication arises in variance analysis when...Ch. 17 - Variance analysis can be useful in a manufacturing...Ch. 17 - How would you recommend accounting for variances...Ch. 17 - What does a manager learn by computing an industry...Ch. 17 - Why is there no efficiency variance for revenues?Ch. 17 - For what decisions would a manager want to know...Ch. 17 - If the sales activity or materials efficiency...Ch. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - What is the advantage of recognizing materials...
Ch. 17 - How could a professional sports firm use the mix...Ch. 17 - Prob. 12CADQCh. 17 - How could a hospital firm use the mix variance to...Ch. 17 - Prob. 14CADQCh. 17 - There is no reason to investigate favorable...Ch. 17 - Prob. 16CADQCh. 17 - Consider a firm in the sharing economy, such as...Ch. 17 - Prob. 18ECh. 17 - Prob. 19ECh. 17 - Prob. 20ECh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Prob. 22ECh. 17 - Industry Volume and Market Share Variances DB Ice...Ch. 17 - Olive Tree Products sold 72,000 units during the...Ch. 17 - Prob. 25ECh. 17 - Sales Mix and Quantity Variances A-Zone Media...Ch. 17 - Prob. 27ECh. 17 - Sales Mix and Quantity Variances The restaurant at...Ch. 17 - Sales Mix and Quantity Variances Chow-4-Hounds...Ch. 17 - Materials Mix and Yield Variances Stacy, Inc.,...Ch. 17 - Materials Mix and Yield Variances Johns...Ch. 17 - Labor Mix and Yield Variances Matts Eat N Run has...Ch. 17 - Flexible Budgeting, Service Organization KB is a...Ch. 17 - Prob. 34ECh. 17 - Prob. 35ECh. 17 - Sales Price and Activity Variances EZ-Tax is a tax...Ch. 17 - Write a memo to the senior manager of EZ-Tax...Ch. 17 - Variable Cost Variances The standard direct labor...Ch. 17 - Refer to the information in Exercise...Ch. 17 - Prob. 40PCh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Industry Volume and Market Share Variances:...Ch. 17 - Industry Volume and Market Share: Missing Data The...Ch. 17 - Sales Mix and Quantity Variances Lake Cellars...Ch. 17 - Analyze Performance for a Restaurant Dougs Diner...Ch. 17 - Nonmanufacturing Cost Variances FSBCU is a...Ch. 17 - Performance Evaluation in Service Industries Bay...Ch. 17 - Refer to the information in Problem...Ch. 17 - Prob. 49PCh. 17 - Refer to the data for the Peninsula Candy Company...Ch. 17 - Materials Mix and Yield Variances Plano Products...Ch. 17 - Pinnuck Products makes a liquid solvent using two...Ch. 17 - Labor Mix and Yield Variances Matthews Bros, is a...Ch. 17 - Refer to the information in Problem...Ch. 17 - Derive Amounts for Profit Variance Analysis...Ch. 17 - Flexible Budget Oak Hill Township operates a motor...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $37. The a la carte option has a budgeted average price of $26 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $17 and the a la carte option averages $12 per meal in budgeted variable cost. The manager estimates that 2,100 people will order a meal in any month. For July, the restaurant served a total of 1,900 meals, including 640 buffet options. Total revenues were $25,600 for buffet meals and $34,020 for the a la carte meals. Required: a. Compute the activity variance for the restaurant for July. b. Compute the mix and quantity variances for July. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for…arrow_forwardQ. 8arrow_forwardComplete the flexibile budget performance reportarrow_forward
- Service yield pricing and differential equations Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract business customers during the weekdays and leisure customers during the weekend. However, the leisure customers on weekends occupy fewer rooms than do business customers on weekdays. Thus, Cityscape plans to provide special weekend pricing to attract additional leisure customers. A hotel room is priced at 180 per room night. The cost of a hotel room night includes the following: The special weekend price is proposed for 120 per room night. At this price, it is anticipated that average occupancy for the weekend (Friday, Saturday, and Sunday) will increase from 30% to 50% of available rooms. a. What is the contribution margin for a room night under the normal pricing if only the hotel depreciation and hotel staff (excluding housekeeping) are assumed fixed for all occupancy levels? b. Determine the contribution margin for a room night under the proposed weekend pricing. c. Prepare a differential analysis showing the differential profit for an average weekend between the existing (Alternative 1) and discount (Alternative 2) price plans. d. Should management accept the proposed weekend pricing plan? Explain.arrow_forwardThe Sea Wharf Restaurant would like to determine the best way to allocate a monthly advertising budget of 1,000 between newspaper advertising and radio advertising. Management decided that at least 25% of the budget must be spent on each type of media and that the amount of money spent on local newspaper advertising must be at least twice the amount spent on radio advertising. A marketing consultant developed an index that measures audience exposure per dollar of advertising on a scale from 0 to 100, with higher values implying greater audience exposure. If the value of the index for local newspaper advertising is 50 and the value of the index for spot radio advertising is 80, how should the restaurant allocate its advertising budget to maximize the value of total audience exposure? a. Formulate a linear programming model that can be used to determine how the restaurant should allocate its advertising budget in order to maximize the value of total audience exposure. b. Develop a spreadsheet model and solve the problem using Excel Solver.arrow_forwardDetermine the projected food sales by meal period for June 20X2. Assume that the first day of the month is a Sunday. Problem 6 Horner's Corner projected 3,000 lunches to be sold for September at an average price of $5.50. The actual sales were 3,200 meals and food revenue of $18,400. Required: boc 1. Determine the budget variance. 2. Determine the volume variance. 3. Determine the price variance.arrow_forward
- A manager of one Indian restaurant with a take-away service wants to prepare a detailed budget for the next year. The following information is available from the monthly accounts. Calculate the fixed and variable cost elements using the high-low method. Month July August September October November December No. of deliveries 403 291 348 521 387 Total delivery cost (OMR) 662.70 561.90 613.20 627.60 768.90 648.30arrow_forwardplease it is my humble request answer complete and correct with all working answer in textarrow_forwardJackson County Senior Services is a nonprofit organization devoted to providing essential services to seniorswho live in their own homes within the Jackson County area. (DATA is Available in the picture) The company measures its activity in terms of flights. Customers can buy individual tickets for overflightsor hire an entire plane for an overflight at a discount. Required: Prepare the company Planning Budget by using planning data at 60 Flights. Prepare company flexible budgets by flex data (at 70 Flights) Prepare a complete variance report showing the company’s Activity and Revenue and spending variances for August.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
What is Risk Management? | Risk Management process; Author: Educationleaves;https://www.youtube.com/watch?v=IP-E75FGFkU;License: Standard youtube license