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Concept introduction:
Variance: The term variance is used under standard costing system. Variance is actually the difference between the standard amount and actual amount. The variance can be calculated for costs and revenues.
Requirement 1:
To calculate:
The Sales Price and Volume variances.
Concept introduction:
Standard Costing System: Standard Costing system allows estimating the costs, preparing budgets for future periods, and analyzing the performance by comparing the budgets with actual results and find variances.
Variance: The term variance is used under standard costing system. Variance is actually the difference between the standard amount and actual amount. The variance can be calculated for costs and revenues.
Requirement 2:
To calculate:
The Sales Price and Volume variances.
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Chapter 8 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
- Mia Wiz sells computers. During May, it sold 400 computers at a $900 per unit price. The fixed budget for May predicted sales of 450 computers at an per unit price of $850. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price 1&2. Compute the sales price variance and the sales volume variance for May. Identify it as favorable or unfavorable. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Sales Flexible Budget Budgeted Sales $ $ Sales price variance Sales volume variance %24arrow_forwardMia Wiz sells computers. During May, it sold 400 computers at a $1,100 per unit price. The fixed budget for May predicted sales of 450 computers at an per unit price of $1,080. AQ Actual Quantity SQ Standard Quantity AP Actual Price SP- Standard Price 1&2. Compute the sales price variance and the sales volume variance for May. Identify it as favorable or unfavorable. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Actual Sales Flexible Budget 0 0 S 0 Budgeted Salesarrow_forwardFarad, Inc., specializes in selling used trucks. During the month, Farad sold 52 trucks at an average price of $9,400 each. The budget for the month was to sell 47 trucks at an average price of $9,800 each.AQ = Actual QuantitySQ = Standard QuantityAP = Actual PriceSP = Standard PriceCompute the dealership’s sales price variance and sales volume variance for the month and classify each as favorable or unfavorable.arrow_forward
- PLEASE ANSWER THE FOLLOWING QUESTIONS: Requirements 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? Data table Budget for 2020 Selling Variable Cost Cartons Product Price per Carton Sold Kostor $11.00 $ Limba $ 23.00 $ 6.40 16.15 Actual for 2020 Selling Variable Cost Cartons Price per Carton Sold 7.40 138,600 16.35 59,400 132,000 $11.60 S 88,000 $ 24.40 $arrow_forwardSunshine Foods manufactures pumpkin scones. For January 2017, it budgeted to purchase and use 14,750 pounds of pumpkin at $0.92 a pound. Actual purchases and usage for January 2017 were 16,000 pounds at $0.85 a pound. Sunshine budgeted for 59,000 pumpkin scones. Actual output was 59,200 pumpkin scones. 1. Compute the flexible-budget variance. 2. Compute the price and efficiency variances. 3. Comment on the results for requirements 1 and 2 and provide a possible explanation for themarrow_forwardSamsung offers sales price discounts on some products. Samsung can use sales variance analysis to assess the effects of these sales discounts. Assumed data for one model of a Samsung television follow. TV Sales (units) Sales price per unit Budgeted 2,000 units $ 1,800 Actual 3,000 units $ 1,100 AQ = Actual Quantity AP Actual Price SP Standard Price SQ Standard Quantity Required: 1. & 2. Compute the sales price, sales volume and total sales variances and identify each as favorable or unfavorable. Actual Sales $ 0 Flexible Budget $ 10 10 $ 0 Fixed Budgetarrow_forward
- Harvest Foods manufactures pumpkin scones. For January 2017, it budgeted to purchase and use 16,500 pounds of pumpkin at $0.87 a pound. Actual purchases and usage for January 2017 were 17,000 pounds at $0.82 a pound. Harvest budgeted for 66,000 pumpkin scones. Actual output was 57,800 pumpkin scones. 1. Compute the flexible-budget variance. 2. Compute the price and efficiency variances. 3. Comment on the results for requirements 1 and 2 and provide a possible explanation for them.arrow_forwardSunshine Foods manufactures pumpkin scones. For January 2017, it budgeted to purchase and use 14,750 pounds of pumpkin at $0.92 a pound. Actual purchases and usage for January 2017 were 16,000 pounds at $0.85 a pound. Sunshine budgeted for 59,000 pumpkin scones. Actual output was 59,200 pumpkin scones. Q.Compute the price and efficiency variancesarrow_forwardBerlin Corp. buys and sells two types of sunglasses in Berlin: ABC and DEF. Budgeted and actual results are as follows -> see picture Berlin corp. prepared the budget for 2017 assuming 12% of market share based on total sales of 1,900,000 units in Berlin. However, actual sales volume in Berlin was 2,400,000 units. Calculate the market-share and market-size variances for Berlin corp. in 2017. Calculate all variances in terms of contribution margin. Comment on the results.arrow_forward
- Holland Company is a garden products wholesale firm. In December, Holland Company expects to sell 84,000 bags of vegetable fertilizer at an average price of $8.75 per bag. Actual results are 85,000 bags sold at an average price of $8.50 per bag. REQUIRED: 1. Calculate the sales price variance for December. 2. Calculate the sales volume variance for December. 3. Calculate the overall sales variance for December. Explain why it is favorable or unfavorable. What if December sales were actually 83,500 bags? How would that affect the sales price variance? The sales volume variance? The overall sales variance?arrow_forwardCampbell Industries has gathered the following information about the actual sales revenues and expenses for its pharmaceuticals segment for the most recent year. E (Click the icon to view the actual data.) Prepare a segment margin performance report for the pharmaceutical segment. Calculate a variance and a variance percentage for each line in the report. Round to the nearest hundredth for the variance percentages (for example, if your answer is 16.2384%, round it to 16.24%). Budgeted data for the same time period for the pharmaceutical segment are as follows (all data are in millions): E (Click the icon to view the budgeted data.) Begin by preparing the performance report through the contribution margin line. Next, complete the report through the segment margin line, and then, finally, complete the report through the operating income line. (Enter the variances as positive numbers. Round the variance percentages to the nearest hundredth percent, X.XX%.) Performance Report Data table…arrow_forwardLowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing decided to lower its price to 19 per unit expecting it can increase the units sold by 16%. a. Compute the normal revenue with a 20 selling price. b. Compute the planned revenue with a 19 selling price. c. Compute the actual revenue for November, assuming 135,000 units were sold in November at 19 per unit. d. Compute the revenue price variance, assuming 135,000 units were sold in November at 19 per unit. e. Compute the revenue volume variance, assuming 135,000 units were sold in November at 19 per unit. f. Analyze and interpret the lowering of the price to 19.arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
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