Question

Using the Partial Financials given below, calculate the Standard COGS %. Multiply the Standard COGS % by the total actual costs to determine expected sales. Compare expected sales to actual sales.

	JUNE		JULY		AUGUST
SALES	24812.25		28516		28232.75
ACTUAL COGS
ICE CREAM	5247.79		6025.43		5505.38
TOPPINGS	1315.05		1511.35		1594.57
CONES	1463.92		1553.82		1665.73
PAPER GOODS	570.58		574.91		592.89
Total Actual Costs	8597.34		9665.51		9358.57
GROSS MARGIN	16214.91		18850.49		18874.18
GP %	65.35%		66.10%		66.85%
SANDARD COGS
ICE CREAM	4878.36		5808.18		5263.78
TOPPINGS	1103.68		1115.52		1198.66
CONES	1134.4		1242.5		1228.66
PAPER GOODS	434.72		477.07		471.33
Total Standard Costs	7551.16		8643.27		8162.43
Gross Margin	17261.09		19872.73		20070.32
GP %	69.57%		69.69%		71.09%

Answer 1

Standard COGS % = Standard COGS / Sales

June = $7551.16 / 24812.25 = 30.43%
Total Actual Costs = $8597.34
Expected Sales = $8597.34 / 30.43% = $28252.84
Actual Sales = $24812.25
Variance = ($3440.59)

July = $8643.27 / 28516 = 30.31%
Total Actual Costs = $9665.51
Expected Sales = $9665.51 / 30.31% = $31888.85
Actual Sales = $28516
Variance = ($3372.85)

August = $8162.43 / 28232.75 = 28.91%
Total Actual Costs = $9358.57
Expected Sales = $9358.57 / 28.91% = $32371.39
Actual Sales = $28232.75
Variance = ($4138.64)