Gourmet Aroma Coffee House has an exclusive contract with Columbia exporters. Two brands of gourmet coffee are imported, Morning Thunder (MT) and Evening Tender (ET). The following data are provided for the current fiscal year: Budgeted Operating Results MT ET MT ET Price per pound $ 40 $ 60 $ 50 $ 56 Variable cost per pound 20 36 24 40 Sales (in pounds) 5,300 5,300 4,686 5,964 The total market was estimated to be 106,000 pounds at the time of budget. The actual total market for the year is 114,000 pounds. What is the firm's total sales mix variance? Multiple Choice $11,316 favorable. $2,916 unfavorable. $1,356 unfavorable. $7,276 favorable. $2,556 favorable.
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.
Gourmet Aroma Coffee House has an exclusive contract with Columbia exporters. Two brands of gourmet coffee are imported, Morning Thunder (MT) and Evening Tender (ET). The following data are provided for the current fiscal year:
| Budgeted | Operating Results | |||||||||||
| MT | ET | MT | ET | |||||||||
| Price per pound | $ | 40 | $ | 60 | $ | 50 | $ | 56 | ||||
| Variable cost per pound | 20 | 36 | 24 | 40 | ||||||||
| Sales (in pounds) | 5,300 | 5,300 | 4,686 | 5,964 | ||||||||
The total market was estimated to be 106,000 pounds at the time of budget. The actual total market for the year is 114,000 pounds.
What is the firm's total sales mix variance?
-
$11,316 favorable.
-
$2,916 unfavorable.
-
$1,356 unfavorable.
-
$7,276 favorable.
-
$2,556 favorable.
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