The PopStop manufactures and sells three soft drinks: Kola, Lima, and Oranga. Budgeted and actual results for
Question:
The PopStop manufactures and sells three soft drinks: Kola, Lima, and Oranga. Budgeted and actual results for 2018 are as follows:
Required
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?
Contribution MarginContribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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1 Budget for 2018 Solution Exhibit 1620 presents the salesvolume salesquantity and salesmix variances for each product and in total for 2018 2 The breakdown of the favourable salesvolume variance of 820000 shows that the biggest contributor is the 500000 unit increase in sales resulting in a favourable salesquantity variance of 1054000 There is a partially offsetting unfavourable salesmix variance ...View the full answer
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Related Book For 
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134453736
8th Canadian Edition
Authors: Srikant M. Datar, Madhav V. Rajan, Louis Beaubien
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