Question
The Octova Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data
The Octova Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year 2017 are as follows:
Static Budget Zenith House-Helper Total
Number sold 20,000 80,000 100,000
Contribution margin $4,600,000 $15,200,000 $19,800,000
Actual Results Zenith House-Helper Total
Number sold 21,500 64,500 86,000
Contribution margin $6,665,000 $14,190,000 $20,855,000
Computer the variances below in terms of contribution margin $. Indicate whether the variance is favorable or unfavorable.
a. Compute total sales-volume variance:
b. Compute the sales-mix variance by type of vacuum cleaner and in total.
Zenith:
House Helper:
Total:
c. Compute the sales-quantity variance by type of vacuum cleaner and in total.
Zenith:
House Helper:
Total:
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