The Muto Corporation sells two brands of wine glasses: Plain and Chic. Muto provides the following information for sales in the month of June 2017: (Click the icon to view the data for sales.) All variances are computed in contribution-margin terms. Read the requirements. - Data Table ribution margin (CM). Budgeted Static- budget Static-budget total contribution margin $ 12,500 Budgeted units to be sold of all glasses 2,500 units Budgeted contribution margin per unit of Plain $4 per unit Budgeted contribution margin per unit of Chic $8 per unit Total sales-quantity variance $3,500 U Actual sales-mix percentage of Plain 60% = total CM Requirement 1. Calculate the sales-quantity variances for each product for June 2017 Begin by determining the basic formula for Muto Corporation's static-budget total contribution margin (CM). Plain wine glasses Chic wine glasses Static- Budgeted Budgeted Budgeted Budgeted Budgeted Budgeted budget ) + total CM x Rearrange the formula to determine the sales mix for each product. %. The sales-mix percentage of Plain wine glasses is The sales-mix percentage of Chic wine glasses is %. 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 = il The actual number of all glasses sold is units. Now determine the formula, then calculate the sales-quantity variances for each product for June 2017. Label each variance as favorable (F) or unfavorable (U). (Enter percentages, if any, as decimals to two places, X.XX. Enter all variances as positive numbers.) Sales- Budgeted Actual Budgeted Budgeted quantity variance Plain Chic ( X X 11 - - - X x 11 X X 11 Requirement 2. Calculate the individual-product and total sales-mix variances for June 2017. Calculate the individual-product and total sales-volume variances for June 2017 Begin with the individual-product sales-mix variances for June 2017. Determine the formula, then calculate the variance for each product. Label each variance as favorable (F) or unfavorable (U). (Enter percentages, if any, as decimals to two places, X.XX. Enter all variances as positive numbers.) Sales- Actual Actual Budgeted Budgeted mix x ( variance Plain * = Chic The total sales-mix variance is Now calculate the individual-product sales-volume variances for June 2017. Determine the formula, then calculate the variance for each product. Label each variance as favorable (F) or unfavorable (U). (Enter all variances as positive numbers.) Now calculate the individual product sales-volume variances for June 2017. Determine the formula, then calculate the variance for each product. Label each variance as favorable (F) or unfavorable (U). (Enter all variances as positive numbers.) Sales- volume = variance Plain ( II Chic II The total sales-volume variance is Requirement 3. Briefly describe the conclusions you can draw from the variances. Muto Corporation shows a(n) sales-quantity variance because it sold wine 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 favor of the higher contribution margin wine glasses
