Chow-4-Hounds (C4H) makes pet food for sale in supermarkets. C4H produces two general types: Branded and Generic. The two differ primarily in the ingredients used. At budget, Branded sells for $15 per case and has a variable cost to produce of $8 per case. Generic sells for a budgeted $12 per case and has a budgeted variable cost to produce of $7 per case. C4H expects to sell 20 percent Branded and 80 percent Generic regardless of the sales volume. C4H budgeted total sales of 203,000 cases for March. Actual case volume sold in March was 216,000 cases, of which 61,500 were Branded. Total actual revenues in March were $2,058,000, of which $781,500 were from sales of Branded cases. Required: a. Compute the activity variance for C4H for March. b. Compute the mix and quantity variances for March.
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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![Chow-4-Hounds (C4H) makes pet food for
sale in supermarkets. C4H produces two
general types: Branded and Generic. The
two differ primarily in the ingredients used.
At budget, Branded sells for $15 per case
and has a variable cost to produce of $8
per case. Generic sells for a budgeted $12
per case and has a budgeted variable cost
to produce of $7 per case. C4H expects to
sell 20 percent Branded and 80 percent
Generic regardless of the sales volume.
C4H budgeted total sales of 203,000 cases
for March. Actual case volume sold in
March was 216,000 cases, of which 61,500
were Branded. Total actual revenues in
March were $2,058,000, of which $781,500
were from sales of Branded cases.
Required:
a. Compute the activity variance for C4H
for March.
b. Compute the mix and quantity variances
for March.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3eeb2206-9ee8-46b0-ad5b-d8867fe9ecf8%2F23c82377-19be-4374-bc35-69a10ebbefb0%2F17l59f_processed.jpeg&w=3840&q=75)
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