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Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three varieties of soup based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for the most recent quarter. Budget (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Actual (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Bean 30 $ 1,200 840 $360 240 $ 120 24 $ 972 672 $ 300 252 $48 Sales mix variance Quantity variance cases Beant cases Tomato 30 $ 2,400 1,920 $ 480 240 $ 240 Tomato 30 $ 2,400 1,932 $ 468 264 $ 204 cases cases Vegetable 60 $3,600 2,760 $ 840 360 $480 cases Vegetable 63 $3,600 2,784 $816 378 $ 438 cases Required: Break down the total activity variance into sales mix and quantity parts. Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Total 120 cases $ 7,200 5,520 $ 1,680 840 $840 300 $ 540 Industry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was 1,140,000 cases. $ 6,972 5,388 $ 1,584 894 Total 117 cases $ 690 330 $360

Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three varieties of soup based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for the most recent quarter. Budget (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Actual (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Bean 30 $ 1,200 840 $360 240 $ 120 24 $ 972 672 $ 300 252 $48 Sales mix variance Quantity variance cases Beant cases Tomato 30 $ 2,400 1,920 $ 480 240 $ 240 Tomato 30 $ 2,400 1,932 $ 468 264 $ 204 cases cases Vegetable 60 $3,600 2,760 $ 840 360 $480 cases Vegetable 63 $3,600 2,784 $816 378 $ 438 cases Required: Break down the total activity variance into sales mix and quantity parts. Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Total 120 cases $ 7,200 5,520 $ 1,680 840 $840 300 $ 540 Industry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was 1,140,000 cases. $ 6,972 5,388 $ 1,584 894 Total 117 cases $ 690 330 $360

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 1CMA: Taylor Corporation is analyzing the cost behavior of three cost items, A, B, and C, to budget for...
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I need help with sales mix variance and quantity variance, please. 

Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three varieties of soup based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for the most recent quarter. Budget (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Actual (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Bean 30 $ 1,200 840 $360 240 $ 120 24 $ 972 672 $ 300 252 $ 48 Sales mix variance Quantity variance cases Bean cases Tomato 30 $ 2,400 1,920 $ 480 240 $ 240 Tomato 30 $ 2,400 1,932 $ 468 264 $ 204 cases cases Vegetable 60 $3,600 2,760 $ 840 360 $480. cases Vegetable 63 $3,600 2,784 $ 816 378 $ 438 cases Total 120 cases $ 7,200 5,520 $1,680 840 Industry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was 1,140,000 cases. Required: Break down the total activity variance into sales mix and quantity parts. Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. F $ 840 300 $ 540 $ 6,972 5,388 $ 1,584 894 Total 117 cases $ 690 330 $360
Transcribed Image Text:Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three varieties of soup based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for the most recent quarter. Budget (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Actual (all units and costs in thousands) Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Bean 30 $ 1,200 840 $360 240 $ 120 24 $ 972 672 $ 300 252 $ 48 Sales mix variance Quantity variance cases Bean cases Tomato 30 $ 2,400 1,920 $ 480 240 $ 240 Tomato 30 $ 2,400 1,932 $ 468 264 $ 204 cases cases Vegetable 60 $3,600 2,760 $ 840 360 $480. cases Vegetable 63 $3,600 2,784 $ 816 378 $ 438 cases Total 120 cases $ 7,200 5,520 $1,680 840 Industry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was 1,140,000 cases. Required: Break down the total activity variance into sales mix and quantity parts. Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. F $ 840 300 $ 540 $ 6,972 5,388 $ 1,584 894 Total 117 cases $ 690 330 $360
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