A-Zone Media sells two models of e- readers. The budgeted price per unit for the wireless model is $192 and the budgeted price per unit for the wireless and cellular model is $416. The master budget called for sales of 10,000 wireless models and 2,500 wireless and cellular models during the current year. Actual results showed sales of 7,500 wireless models, with a price of $200 per unit, and 4,000 wireless and cellular models, with a price of $400 per unit. The standard variable cost per unit is $80 for a wireless model and $160 for a wireless and cellular model. a. Compute the activity variance for these data b. Compute the mix and quantity variance for these data
A-Zone Media sells two models of e- readers. The budgeted price per unit for the wireless model is $192 and the budgeted price per unit for the wireless and cellular model is $416. The master budget called for sales of 10,000 wireless models and 2,500 wireless and cellular models during the current year. Actual results showed sales of 7,500 wireless models, with a price of $200 per unit, and 4,000 wireless and cellular models, with a price of $400 per unit. The standard variable cost per unit is $80 for a wireless model and $160 for a wireless and cellular model. a. Compute the activity variance for these data b. Compute the mix and quantity variance for these data
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:A-Zone Media sells two models of e-
readers. The budgeted price per unit for
the wireless model is $192 and the
budgeted price per unit for the wireless
and cellular model is $416. The master
budget called for sales of 10,000 wireless
models and 2,500 wireless and cellular
models during the current year. Actual
results showed sales of 7,500 wireless
models, with a price of $200 per unit, and
4,000 wireless and cellular models, with a
price of $400 per unit. The standard
variable cost per unit is $80 for a wireless
model and $160 for a wireless and cellular
model.
a. Compute the activity variance for these
data
b. Compute the mix and quantity variance
for these data
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