Question
Analysis of sales variances to develop strategies to improve its profit position is an ongoing exercise at CPL Ltd. The company produces and sells three
Analysis of sales variances to develop strategies to improve its profit position is an ongoing exercise at CPL Ltd. The company produces and sells three products, Date Prune, and Cashella. The following budgeted and actual results were extracted from the companys 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 | 650 | 390,000 |
| 2,840,000 | 2,000 |
|
| 1,456,000 |
Actual Results
Product | Total Sales $ | Volume/units | Price $ | Contribution margin per unit $ | Total contribution margin $ |
Date | 1,540,000 | 700 | 2,200 | 1,000 | 700,000 |
Prune | 957,600 | 760 | 1,260 | 600 | 456,000 |
Cashella | 614,400 | 640 | 960 | 540 | 345,600 |
| 3,112,000 | 2,100 |
|
| 1,501,600 |
Required:
- Sales margin price variance.
- Sales margin mixture variance.
- Sales margin volume variance.
- Sales margin quantity variance.
Total sales margin total variance.
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