Part $1$

The Kazu Corporation $($KC$)$ sells two brands of wine glasses: Plain and Chic. KC provides the following information for sales in the month of June:

LOADING...$($Click the icon to view the information for sales.$)$

All variances are to be computed in contribution$-$margin terms.

Required

$1.$

Calculate the sales$-$quantity variances for each product for June.

$2.$

Calculate the individual$-$product and total sales$-$mix variances for June. Calculate the individual$-$product and total sales$-$volume variances for June.

$3.$

Briefly describe the conclusions you can draw from the variances.

Question content area bottom

Part $1$

Requirement $1.$ Calculate the sales$-$quantity variances for each product for June.

Begin by determining the basic formula for Kazu Corporation's static$-$budget total contribution margin $($CM$).$

Plain wine glasses

Chic wine glasses

Budgeted

Budgeted

Budgeted

Budgeted

Budgeted

Budgeted

Static$-$budget

$($

x

x

$)+($

x

x

$)=$

total CM

Part $2$

Rearrange the formula to determine the sales mix for each product.

The sales$-$mix percentage of Plain wine glasses is

enter your response here$\%.$

Part $3$

The sales$-$mix percentage of Chic wine glasses is

enter your response here$\%.$

Part $4$

Next, determine the formula and compute the budgeted CM based on actual units sold of all products at the budgeted mix.

Budgeted CM based on actual

$=$

units sold at the budgeted mix

$=$

Part $5$

The actual number of all glasses sold is

enter your response here units.

Part $6$

Now, determine the formula, and then calculate the sales$-$quantity variances for each product for June. Label each variance as favourable $($F$)$ or unfavourable $($U$).($Enter percentages, if any, as decimals rounded to two places, $"$X$.$XX$".)$

Budgeted

Actual

Budgeted

Budgeted

Sales$-$quantity

$($

$)$ x

x

$=$

variance

Plain

$($

$)$ x

x

$=$

Chic

$($

$)$ x

x

$=$

Part $7$

Requirement $2.$ Calculate the individual$-$product and total sales$-$mix variances for June. Calculate the individual$-$product and total sales$-$volume variances for June.

Begin with the individual$-$product sales$-$mix variances for June. Determine the formula, and then calculate the variance for each product. Label each variance as favourable $($F$)$ or unfavourable $($U$).($Enter percentages, if any, as decimals rounded to two places, $"$X$.$XX$".)$

Part $8$Part $9$

Actual

Budgeted

Actual

Budgeted

Sales$-$mix

$($

$)$ x

x

$=$

variance

Plain

$($

$)$ x

x

$=$

Chic

$($

$)$ x

x

$=$

Part $10$

The total sales$-$mix variance is

$.$

Part $11$

Now, calculate the individual$-$product sales$-$volume variances for June. Determine the formula, and then calculate the variance for each product. Label each variance as favourable $($F$)$ or unfavourable $($U$).$

Part $12$Part $13$

Sales$-$volume

$($

$)$ x

$=$

variance

Plain

$($

$)$ x

$=$

Chic

$($

$)$ x

$=$

Part $14$

The total sales$-$volume variance is

$.$

Part $15$

Requirement $3.$ Briefly describe the conclusions you can draw from the variances.

Kazu Corporation shows a$($n$)$

favourable

unfavourable

sales$-$quantity variance because it sold

fewer

more

wine glasses in total than was budgeted. This is partially offset by a$($n$)$

favourable

unfavourable

sales$-$mix variance because the actual mix of wine glasses sold has shifted in favour of the higher$-$contribution$-$margin

Chic

Plain

wine glasses.

The sales$-$mix percentage of Plain wine glasses is$\%.$The sales$-$mix percentage of Chic wine glasses is$\%.$The actual number of all glasses sold isunits.Kazu Corporation shows a$($n$)$sales$-$quantity variance because it soldsales$-$quantity variance because it soldwine glasses in total than was budgeted.This is partially offset by a$($n$)$sales$-$mix variance because the actual mix of wine glasses sold has shifted in favour of the higher$-$contribution$-$marginsales$-$mix variance because the actual mix of wine glasses sold has shifted in favour of the higher$-$contribution$-$marginwine glasses.

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Sales information

Static$-$budget total contribution margin

$$14,720$

Budgeted units to be sold of all glasses

$2,300$ units

Budgeted contribution margin per unit of Plain

$$5$ per unit

Budgeted contribution margin per unit of Chic

$$12$ per unit

Total sales$-$quantity variance

$$3,840$ U

Actual sales$-$mix percentage of Plain

$60\%$

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