2. Sales Variances Springwater Brewery has two main products: premium and regular ale. Its operating results and master budget for 2019 (000s omitted) follow: Operating Results of 2019 Master Budget for 2019 Premium Regular Total Premium Regular Total Barrels 180 540 720 240 360 600 Sales $28,800 $62,100 $90,900 $36,000 $43,200 $79,200 Variable expenses 16,200 56,700 40,500 $21,600 5,000 $ 2,600 $16,600 21,600 27,000 48,600 $12,600 $34,200 $14,400 10,000 $ 4,400 $16,200 Contribution margin Fixed expenses $30,600 15,000 10,000 15,000 5,000 Operating income $19,200 $11,200 $15,600 evel Control Pam Kuder, CEO, expected the total industry sales to be 1,500,000 barrels during the period. After the year, Mark Goldfeder, the controller, reported that the total sales for the industry were 1,600,000 barrels. Required Calculate the following: 1. Selling price variances for the period for each product and for the firm. 2. Sales volume variances for the period for each product and for the firm. 3. Sales quantity variances for each product and the firm. 4. Sales mix variances for the period for each product and for the firm. 5. The sum of the sales quantity variance and sales mix variance. Also, verify that this total equals the sales volume variance. 6. Market size variance for the period. 7. Market share variance for the period. 8. The sum of the market size variance and market share variance. Also, verify that this total equals the sales quantity variance.
2. Sales Variances Springwater Brewery has two main products: premium and regular ale. Its operating results and master budget for 2019 (000s omitted) follow: Operating Results of 2019 Master Budget for 2019 Premium Regular Total Premium Regular Total Barrels 180 540 720 240 360 600 Sales $28,800 $62,100 $90,900 $36,000 $43,200 $79,200 Variable expenses 16,200 56,700 40,500 $21,600 5,000 $ 2,600 $16,600 21,600 27,000 48,600 $12,600 $34,200 $14,400 10,000 $ 4,400 $16,200 Contribution margin Fixed expenses $30,600 15,000 10,000 15,000 5,000 Operating income $19,200 $11,200 $15,600 evel Control Pam Kuder, CEO, expected the total industry sales to be 1,500,000 barrels during the period. After the year, Mark Goldfeder, the controller, reported that the total sales for the industry were 1,600,000 barrels. Required Calculate the following: 1. Selling price variances for the period for each product and for the firm. 2. Sales volume variances for the period for each product and for the firm. 3. Sales quantity variances for each product and the firm. 4. Sales mix variances for the period for each product and for the firm. 5. The sum of the sales quantity variance and sales mix variance. Also, verify that this total equals the sales volume variance. 6. Market size variance for the period. 7. Market share variance for the period. 8. The sum of the market size variance and market share variance. Also, verify that this total equals the sales quantity variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
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Transcribed Image Text:2. Sales Variances
Springwater Brewery has two main products: premium and regular ale. Its operating results and master
budget for 2019 (000s omitted) follow:
Operating Results of 2019
Master Budget for 2019
Premium
Regular
Total
Premium
Regular
Total
Barrels
180
540
720
240
360
600
$28,800
16,200
$62,100
$90,900
56,700
$36,000
$43,200
27,000
$79,200
48,600
Sales
Variable expenses
40,500
21,600
Contribution margin
Fixed expenses
$12,600
10,000
$21,600
$34,200
15,000
$14,400
$16,200
$30,600
5,000
10,000
5,000
15,000
Operating income
$ 2,600
$16,600
$19,200
$ 4,400
$11,200
$15,600
al-Level Control
Pam Kuder, CEO, expected the total industry sales to be 1,500,000 barrels during the period. After the
year, Mark Goldfeder, the controller, reported that the total sales for the industry were 1,600,000 barrels.
Required Calculate the following:
1. Selling price variances for the period for each product and for the firm.
2. Sales volume variances for the period for each product and for the firm.
3. Sales quantity variances for each product and the firm.
4. Sales mix variances for the period for each product and for the firm.
5. The sum of the sales quantity variance and sales mix variance. Also, verify that this total equals the
sales volume variance."
6. Market size variance for the period.
7. Market share variance for the period.
8. The sum of the market size variance and market share variance. Also, verify that this total equals the
sales quantity variance.
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