Margot's Ice Cream operates several stores in a major metropolitan city and its suburbs. Its budget and operating data for the currentyear follow:Budgeted DataSellingPrice perActual Operating ResultsSellingPrice perVariableVariableCosts perCosts perFlavorGallonsGallonGallonGallonsGallonGallon$ 1.35$ 0.65$ 1.20$ 0.55252,000315,000210,00063,000192,000285,000340,000183,000VanillaChocolate1.700.801.550.70StrawberryAnchovy1.900.802.100.852.701.203.201.40Required:1. Compute these variances for the individual flavors and total quantity sold. (Use the Contribution Margin in your calculations and donot round intermediate calculations.)a.b.C.FlavorSales Volume VarianceSales Mix VarianceSales Quantity VarianceVanillaChocolateStrawberryAnchovyTotal

The different variances are computed as follows: Sales volume variance = (AQ - BQ) * BCM Sales mix…

Answered: Margot's Ice Cream operates several…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month $ 1 Margin of safety (in dollars) 2. Margin of safety percentage 27 $ 12 $ 12,300 978 Required: 1. What is the company's margin of safety? (Do not round intermediate calculations.) 2. What is the company's margin of safety as a percentage of its sales? (Round your percentage answer to 2 decimal places (i.e. 1234 should be entered as 12.34).)
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Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below: Percentage of total sales Sales Variable expenses Contribution margin Fixed expenses Net operating income White 48% $ 374,400 112,320 $ 262,080 Fragrant 20% 100% $ 156,000 30% 124,800 70% $ 31,200 Product 100% 80% 20% Loonzain 32% $ 249,600 137, 280 $ 112,320 100% 55% 45% Total 100% $ 780,000 374,400 405, 600 228,800 $ 176,800 Dollar sales to break-even = Fixed expenses ÷ CM ratio = $228,800 ÷ 0.52 = $440,000 As shown by these data, net operating income is budgeted at $176,800 for the month and the estimated break-even sales is $440,000. Assume actual sales for the month total $780,000 as planned; however, actual sales by product are White, $249,600; Fragrant, $312,000; and Loonzain, $218,400. Required: 1. Prepare a contribution format income statement for the month…
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Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: ● Quarter 1 Quarter 2 Quarter 3 Quarter 4 38,000 58,000 29,000 58,000 Budgeted unit sales Each T-shirt is expected to sell for $13. The purchasing manager buys the T-shirts for $5 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 23 percent of the next quarter's sales demand. Selling and administrative expenses are budgeted at $76,000 per quarter plus 18 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter. 3. Determine budgeted cost of good sold for each quarter. 4. Determine selling and administrative expense for each quarter. 5. Complete the budgeted income statement for each quarter.
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Margot's Ice Cream operates several stores in a major metropolitan city and its suburbs. Its budget and operating data for the current year follow: Flavor Gallons Budgeted Data Selling Price per Gallon Actual Operating Results Vanilla 324,000 $ 1.95 Variable Costs per Gallon $ 1.25 Selling Price per Variable Costs per Gallons Gallon Gallon 264,000 $ 1.80 $ 1.15 Chocolate 405,000 2.90 2.00 375,000 2.75 1.90 Strawberry Anchovy 270,000 2.50 1.40 400,000 2.70 1.45 81,000 3.90 2.40 201,000 4.40 2.60 Required: 1. Compute these variances for the individual flavors and total quantity sold. (Use the Contribution Margin in your calculations and do not round intermediate calculations.) a. b. C. Flavor Sales Volume Variance Sales Mix Variance Sales Quantity Variance Vanilla Chocolate Strawberry Unfavorable Unfavorable Favorable Unfavorable Favorable Unfavorable Favorable Favorable Favorable Anchovy Favorable Favorable Favorable Total Favorable Favorable Favorable
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Sky has set up a jam-making business and is calculating the raw material requirements for the year ahead. Her sales estimates and raw materials usage assumptions are as follows: TABLE 1: Jam sales budget in units (jars) Gooseberry 245,000 Rhubarb Sales units (jars) Opening inventory (jars) 60,000 5,500 30,000 TABLE 2: Jam raw material usage assumptions Gooseberry 0.7kg 0.6kg Rhubarb Fruit per jar Sugar per jar 1.1kg 1.0kg Calculate: (i) The production budget (in quantities) using the opening inventory assumptions in Table 1 above and assuming that closing inventory should be 10% of sales units. (ii) The materials budget (in quantities), identifying how much of each type of raw material is required. (iii) The total raw material purchase budget (in value £ and to the nearest whole £) if gooseberries cost £1.60 per kg; and rhubarb cost £2.25 per kg. Sugar costs £0.21 per kg, jars cost £0.15 each, lids cost £0.02 each and labels (one per jar) cost £0.01 each. (iv) The total cost per jar…
Edward Food Processing Company is a wholesale distributor of biscuits in Holborn.The Company has achieved steady growth over the past few years while Biscuitprices have been on the increase. The Company is planning its budget for the nextfinancial year. Presented below are the data used to project the current year’s aftertax income of £110,400. £Average Sales Price per Box 4.00Average variable costs per Box Cost of Biscuits 2.00 Profit on sale 0.40 Total 2.40Annual fixed cost Selling 160,000 Administrative 280,000 Total 440.000Expected annual sales volume (390,000 boxes) £1,560,000Tax rate 20%Biscuit manufacturers have announced that they will increase prices of theirproducts by an average of 15% in the coming year due to increase in material andlabour costs. Edward Food Processing expects same rates or levels as the currentyear. Required: Determine the Volume of sales the company must achieve in the comingyear to maintain the same net income as projected for the current yearif the…
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Fun Foot buys hiking socks for $5 a pair and sells them for $10. Management budgets monthly fixed expenses of $35,000 for sales volumes between 0 and 12,000 pairs. Requirements 1. Use the income statement approach and the shortcut unit contribution margin approach to calculate monthly breakeven sales in units. 2. Use the shortcut contribution margin ratio approach to compute the breakeven point in sales revenue (sales dollars). 3. Calculate the monthly sales level (in units) required to earn a target operating income of $11,000. Use either the income statement approach or the shortcut contribution margin approach. 4. Prepare a graph of Fun Foot's CVP relationships. Draw the sales revenue line, the fixed expense line, and the total expense line. Label the axes, the breakeven point, the operating income area, and the operating loss area. Requirement 1. Use the income statement approach and the shortcut unit contribution margin approach to calculate monthly breakeven sales in units. Let's…

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