Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tasty Tea Ltd. (TTL) has an exclusive contract with a distributor of high-quality green tea. Two brands of green tea, Longjing and Biluochun, are

image text in transcribed

Tasty Tea Ltd. (TTL) has an exclusive contract with a distributor of high-quality green tea. Two brands of green tea, Longjing and Biluochun, are imported and sold to retail outlets in 100-gram packages. The monthly budget for the contract is based on a combination of forecasted industry sales of 500,000 packages and TTL's expected share of 5% the Canadian market for green tea. Industry sales were 600,000 packages in February, and TTL's operating information for February was as follows: Budgeted Actual Longjing Biluochun Longjing Biluochun Price per package $24.00 $32.00 $22.00 $35.00 Variable cost per package $ 9.00 $12.00 $ 8.00 $13.00 Contribution margin per $15.00 $20.00 $14.00 $22.00 package Sales (packages) 10,000 15,000 9,000 18,000 Required: a) Calculate the following variances for February: i. Market share variance (2 marks) ii. Market size variance (2 marks) b) Briefly explain the results of each of the variance calculations in part (a). (1 mark)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1-27

Authors: James A. Heintz, Robert W. Parry

22nd Edition

130566616X, 978-1305666160

More Books

Students also viewed these Accounting questions

Question

Describe the way perception can cloud judgment.

Answered: 1 week ago

Question

Explain how managers can deal with employee attitudes.

Answered: 1 week ago