Question

Electroline Ltd manufactures and sells three products AB, CD and EF. During 2014 the budgeted and actual results were presented to you the management accountant for analysis.

Budgeted Results

Product | Total Sales $ | Volume /Units | Price$ | Contribution margin per unit $ | Total Contribution Margin |

AB | 1,500,000 | 1,000 | 1,500 | 700 | 700,000 |

CD | 4,000,000 | 2,000 | 2,000 | 800 | 800,000 |

EF | 1,000,000 | 1,000 | 1,000 | 600 | 600,000 |

Actual Results

Product | Total Sales $ | Volume /Units | Price $ |
Contribution margin per unit $ |
Total Contribution Margin $ |

AB | 1,260,000 | 900 | 1,400 | 600 | 540,000 |

CD | 4,560,000 | 1,900 | 2,400 | 900 | 1,710,000 |

EF | 1,484,000 | 1,400 | 1,060 | 720 | 1,008,000 |

Required

a) Sales margin price variance

b) Sales margin mixture variance

c)Sales margin volume variance

d)Sales margin quantity variance

e) Is it easier for management to have control over cost than revenues. Discuss

Answer #1

XYZ Company's budgeted and actual results for last year are as
follows:
Master budget
Actual results
Price
$600
$700
Sales volume (units)
7,000
5,000
Unit VC
$200
$200
Fixed costs
$200,000
$200,000
Required:
(a) Compute budgeted and actual revenue, costs and profits:
Master budget
Actual
Sales volume (units)
Revenue
$
$
Variable costs
$
$
Contribution margin
$
$
Fixed costs
$
$
Profit
$
$
In (b)-(d) below, enter favorable and unfavorable variances as
positive and negative numbers, without...

Pricing Strategy, Sales Variances
Eastman, Inc., manufactures and sells three products: R, S, and
T. In January, Eastman, Inc., budgeted sales of the following.
Budgeted
Volume
Budgeted
Price
Product R
110,500
$26
Product S
149,300
23
Product T
21,200
21
At the end of the year, actual sales revenue for Product R and
Product S was $2,709,600 and $3,590,400, respectively. The actual
price charged for Product R was $24 and for Product S was $22. Only
$10 was charged for...

Pricing Strategy, Sales Variances
Eastman, Inc., manufactures and sells three products: R, S, and
T. In January, Eastman, Inc., budgeted sales of the following.
Budgeted
Volume
Budgeted
Price
Product R
114,900
$28
Product S
148,400
20
Product T
22,700
20
At the end of the year, actual sales revenue for Product R and
Product S was $3,159,000 and $3,081,800, respectively. The actual
price charged for Product R was $27 and for Product S was $19. Only
$10 was charged for...

Pricing Strategy, Sales Variances
Eastman, Inc., manufactures and sells three products: R, S, and
T. In January, Eastman, Inc., budgeted sales of the following.
Budgeted
Volume
Budgeted
Price
Product R
104,800
$28
Product S
150,000
23
Product T
20,900
23
At the end of the year, actual sales revenue for Product R and
Product S was $2,921,400 and $3,601,400, respectively. The actual
price charged for Product R was $27 and for Product S was $22. Only
$13 was charged for...

Pricing Strategy,
Sales Variances
Eastman, Inc.,
manufactures and sells three products: R, S, and T. In January,
Eastman, Inc., budgeted sales of the following.
Budgeted
Volume
Budgeted
Price
Product R
113,200
$27
Product S
154,500
22
Product T
21,500
21
At the end of the
year, actual sales revenue for Product R and Product S was
$3,018,600 and $3,314,000, respectively. The actual price charged
for Product R was $26 and for Product S was $20. Only $10 was
charged for...

Pricing Strategy, Sales Variances
Eastman, Inc., manufactures and sells three products: R, S, and
T. In January, Eastman, Inc., budgeted sales of the following.
Budgeted
Volume
Budgeted
Price
Product R
118,800
$28
Product S
145,300
21
Product T
17,500
19
At the end of the year, actual sales revenue for Product R and
Product S was $3,190,200 and $2,986,800, respectively. The actual
price charged for Product R was $26 and for Product S was $19. Only
$9 was charged for...

Pricing Strategy, Sales Variances Eastman, Inc., manufactures
and sells three products: R, S, and T. In January, Eastman, Inc.,
budgeted sales of the following. Budgeted Volume Budgeted Price
Product R 111,400 $28 Product S 162,300 22 Product T 15,900 19 At
the end of the year, actual sales revenue for Product R and Product
S was $3,094,200 and $3,654,000, respectively. The actual price
charged for Product R was $27 and for Product S was $21. Only $9
was charged for...

The Octova Corporation manufactures two types of vacuum
cleaners: the ZENITH for commercial building use and the
House-Helper for residences. Budgeted and actual operating data for
the year 20X5 are as follows:
Static Budget
ZENITH
House-Helper Total
Number sold 23,000
80,000
103,000
Contribution margin $4,600,000
$24,000,000
$28,600,000
Actual Results
ZENITH
House-Helper Total
Number sold 30,000 60,000 90,000
Contribution margin $4,500,000
$30,000,000
$34,500,000
a. Calculate the contribution margin for
the flexible budget.
ZENITH: ?
House-Helper: ?
Flex-Budget Contribution...

Nappon Co. has two products named X and Y. The firm had the
following master budget for the year just completed:
Product
X
Product
Y
Total
Sales
$260,000
360,000
$620,000
Variable Costs
156,000
180,000
336,000
Contribution Margin
$104,000
$180,000
$284,000
Fixed Costs
130,000
108,000
238,000
Operating Income
($26,000)
$72,000
$46,000
Selling Price per unit
$130.00
$60.00
The following actual operating results were reported after the year
was over:
Product
X
Product
Y
Total
Sales
$202,500
$467,500
$670,000
Variable Costs
117,000...

Ram bikes manufactures a single product. Budgeted results and
actual results for June are as follows:
Fixed Budget Actual Results Variance
Production & Sales (units) 5,000 4,850
$
$ $
Sales Revenue 750,000
751,750 1,750
(F)
Direct Materials 350,000 363,750 13,750 (A)
Direct Labour 150,000 145,500 4,500 (F)
Variable Overhead 50,000 58,200 8,200 (A)
Rent & Rates 25,000 26,000 1,000 (A)
Other Costs
4,000 4,600 600
(A)
Total Costs 579,000
598,050 19,050
(A)
Profit/Loss 171,000
153,700 17,300
(A)
-------------- ------------ ----------------...

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