Margot’s Ice Cream operates several stores in a major metropolitan city and its suburbs. Its budget and operating data for the current year follow: Flavor Budgeted Data Actual Operating Results Gallons Selling Price per Gallon Variable Costs per Gallon Gallons Selling Price per Gallon Variable Costs per Gallon Vanilla 306,000 $ 1.80 $ 1.10 246,000 $ 1.65 $ 1.00 Chocolate 382,500 2.60 1.70 352,500 2.45 1.60 Strawberry 255,000 2.35 1.25 385,000 2.55 1.30 Anchovy 76,500 3.60 2.10 196,500 4.10 2.30 Required: 1. Compute these variances (sales volume variance, sales mix variance, sales quantity variance) for the individual flavors and total quantity sold. (Use the Contribution Margin in your calculations and do not round intermediate calculations.)
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Margot’s Ice Cream operates several stores in a major metropolitan city and its suburbs. Its budget and operating data for the current year follow:
| Flavor | Budgeted Data | Actual Operating Results | ||||
|---|---|---|---|---|---|---|
| Gallons | Selling Price per Gallon | Variable Costs per Gallon | Gallons | Selling Price per Gallon | Variable Costs per Gallon | |
| Vanilla | 306,000 | $ 1.80 | $ 1.10 | 246,000 | $ 1.65 | $ 1.00 |
| Chocolate | 382,500 | 2.60 | 1.70 | 352,500 | 2.45 | 1.60 |
| Strawberry | 255,000 | 2.35 | 1.25 | 385,000 | 2.55 | 1.30 |
| Anchovy | 76,500 | 3.60 | 2.10 | 196,500 | 4.10 | 2.30 |
Required:
1. Compute these variances (sales volume variance, sales mix variance, sales quantity variance) for the individual flavors and total quantity sold. (Use the Contribution Margin in your calculations and do not round intermediate calculations.)
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