Question
The S Company produces and sells two product lines with the following budgeted revenues and expenses: Product X Product Y Expected total industry sales (units)
The S Company produces and sells two product lines with the following budgeted revenues and expenses:
| Product X | Product Y | |
|---|---|---|
| Expected total industry sales (units) | 76,800 | 136,000 |
| Expected S Company sales (units) | 7,680 | 34,000 |
| Budgeted selling price per unit | 160 | 200 |
| Budgeted contribution margin per unit | 90 | 125 |
Actual results for 20x2 included:
| Product X | Product Y | |
|---|---|---|
| Actual industry sales | 100,000 | 145,000 |
| Actual S Company sales | 12,000 | 31,900 |
| Actual selling price (unit) | 150 | 175 |
1. Calculate the sales-volume, sales-mix and market-share variances in terms of contribution margins. 2. In your opinion, when a large sales-volume favourable variance could be an issue?
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Financial Accounting Tools For Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Jill E. Mitchell
10th Edition
1119791081, 978-1119791089
