Question
The Softside manufactures and sells three soft drinks: Kola, Lima, and Oranga. The budgeted and actual results for 2018 are as follows: Budget for 2018
The Softside manufactures and sells three soft drinks: Kola, Lima, and Oranga. The budgeted and actual results for 2018 are as follows:
Budget for 2018
| Selling | Variable Cost | Cases | |||||||
| Price | per Case | Sold | |||||||
| Kola | $6.40 | $4.30 | 500,000 | ||||||
| Lima | $4.70 | $3.20 | 640,000 | ||||||
| Oranga | $7.50 | $5.00 | 1,600,000 | ||||||
Actual for 2018
| Selling | Variable Cost | Cases | |||||||
| Price | per Case | Sold | |||||||
| Kola | $6.60 | $4.80 | 570,000 | ||||||
| Lima | $4.95 | $3.15 | 950,000 | ||||||
| Oranga | $7.30 | $5.10 | 1,660,000 | ||||||
Required
| 1. | Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calculate all variances in terms of contribution margin.) Show results for each product in your computations. |
| 2. | What inferences can you draw from the variances computed in requirement 1? |
Requirement 1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity variance. (Calculate all variances in terms of contribution margin.) Show results for each product in your computations.
Begin by computing the actual contribution margins (CM). Then compute the budgeted contribution margins in dollars for each product and in total for the third quarter of
2018.
| Actual CM | |
| Kola | |
| Lima | |
| Oranga | |
| Total |
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Management
Authors: Richard L. Daft
12th edition
978-1118582695, 1118582691, 9781118801277, 111880127X, 978-1285861982
