Question
Northern Rail recently became aware of an active market for people interested in scenic rail travel and started offering deluxe rail viewing trips for people
Northern Rail recently became aware of an active market for people interested in scenic rail travel and started offering deluxe rail viewing trips for people that like to eat good food while looking at trees and mountains from trains. This will split the rail passenger trips into two segments: Basic and Deluxe.
Budgeted and Actual Financial Information for the Basic and Deluxe are as follows:
Basic (Budget)Basic (Actual)Deluxe (Budget)Deluxe (Actual)Total Sales (in passengers)1,0001,40020080Selling price per unit (in $)1001101,0001,200Variable cost per unit (in $)55150140Fixed cost per unit (in$)8080300300
Required:
Part A: Calculate the Sale mix, yield and quantity variances for each type of seat
Part B: What other variances should be examined when assessing a bonus for the sales manager? (you do not need to calculate the variances in Part B, you only need to state them)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started