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

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Chapter1: Financial Statements And Business Decisions
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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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