Triple Delight is a foodstand located on a busy corner in the local business district. On average
Question:
Triple Delight is a foodstand located on a busy corner in the local business district. On average it sells three cheeseburgers and one fishwich for every four hamburgers sold. The following data were culled from its operation for 2010:
Total operating income variance
Hamburger ................$18,000 Unfavorable
Cheeseburger ............... 50,000 Favorable
Fishwich ................. 10,000 Unfavorable
Sales quantity variance
Hamburger ................ 14,000 Favorable
Cheeseburger ............... 15,000 Favorable
Fishwich ................ 1,000 Favorable
Sales mix variance
Hamburger ............... 2,240 Unfavorable
Cheeseburger .............. 4,800 Unfavorable
Fishwich .................. 1,600 Favorable
Fixed costs variances ........... 0
Market share variance ............$96,000 Unfavorable
Market size variance ...........126,000 Favorable
Change in market share .......... 4%
Fixed cost flexible budget variance ...... 0
The estimated total volume for the foodstands in the region was 2,500,000 units. Consistent good weather pushed the total volume for the year to 4,000,000.
Required
Determine the following:
1. Budgeted weighted-average contribution margin.
2. Budgeted and actual market shares.
3. Budget and actual total units sold.
4. Sales quantity variances for fishwich.
5. Budgeted contribution margin of each product.
6. Actual sales mix of each product.
7. Budget and actual units sold for each product.
Contribution MarginContribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
Step by Step Answer:
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins