Co manufactures and sells two types of sports watch: the Raptor X5, which is designed for running and cycling; and the Hydra 27, which is designed for diving. Sportz Co operates a standard costing system and uses variance analysis to assess sales performance each quarter. Quarter 1 The following information is available for Quarter 1: Raptor X5 Hydra Z7 Budget Actual Budget Actual Sales volume (units) 760 880 760 630 Titi $/unit $/unit $/unit $/unit 260 250 325 300 110 Sales price Variable costs Fixed costs Profit 105 130 120 40 40 50 50 110 105 145 130 Quarter 2 During Quarter 2, the sales volume of both the Raptor X5 and the Hydra 27 were significantly adverse. Fewer units of both products were produced due to a number of unplanned stoppages which were a consequence of breakdowns in manufacturing equipment. Quarter 3 The following variances were calculated for both products: Total sales mix contribution variance $2,025 Favourable $9,675 Adverse Total sales quantity contribution variance En Quarter 3, the sales price variance of the Hydra Z7 was $18,000 Adverse and 600 nits were sold. The budgeted selling price for the Hydra Z7 remained at $325. Time Remaining 02.25 028 Close All Bag for Re Which of the following managers is responsible for the adverse sales volume variance in Quar 27 The production manager The procurement manager The sales manager The information technology manager
Co manufactures and sells two types of sports watch: the Raptor X5, which is designed for running and cycling; and the Hydra 27, which is designed for diving. Sportz Co operates a standard costing system and uses variance analysis to assess sales performance each quarter. Quarter 1 The following information is available for Quarter 1: Raptor X5 Hydra Z7 Budget Actual Budget Actual Sales volume (units) 760 880 760 630 Titi $/unit $/unit $/unit $/unit 260 250 325 300 110 Sales price Variable costs Fixed costs Profit 105 130 120 40 40 50 50 110 105 145 130 Quarter 2 During Quarter 2, the sales volume of both the Raptor X5 and the Hydra 27 were significantly adverse. Fewer units of both products were produced due to a number of unplanned stoppages which were a consequence of breakdowns in manufacturing equipment. Quarter 3 The following variances were calculated for both products: Total sales mix contribution variance $2,025 Favourable $9,675 Adverse Total sales quantity contribution variance En Quarter 3, the sales price variance of the Hydra Z7 was $18,000 Adverse and 600 nits were sold. The budgeted selling price for the Hydra Z7 remained at $325. Time Remaining 02.25 028 Close All Bag for Re Which of the following managers is responsible for the adverse sales volume variance in Quar 27 The production manager The procurement manager The sales manager The information technology manager
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Sportz Co manufactures and sells two types of sports watch: the Raptor X5, which is
designed for running and cycling; and the Hydra Z7, which is designed for diving.
Sportz Co operates a standard costing system and uses variance analysis to assess
sales performance each quarter.
Quarter 1
The following information is available for Quarter 1:
Raptor X5
Budget
Hydra Z7
Budget
Actual
Sales volume (units)
760
$/unit
260
Actual
880
$/unit
250
760
$/unit
630
$/unit
Sales price
325
300
Variable costs
110
105
130
120
40
40
50
Fixed costs
Profit
50
110
105
145
130
Quarter 2
During Quarter 2, the sales volume of both the Raptor X5 and the Hydra Z7 were
significantly adverse. Fewer units of both products were produced due to a number
of unplanned stoppages which were a consequence of breakdowns in manufacturing
equipment.
Quarter 3
The following variances were calculated for both products:
Total sales mix contribution variance
$2,025 Favourable
$9,675 Adverse
Total sales quantity contribution variance
In Quarter 3, the sales price variance of the Hydra Z7 was $18,000 Adverse and 600
units were sold. The budgeted selling price for the Hydra Z7 remained at $325.
Time Remaining 02:28:16
28 of 34
Close All P Elag for Review
Which of the following managers is responsible for the adverse sales volume variance in Quarter
27
The production manager
The procurement manager
The sales manager
The information technology manager
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