Olivet Devices sells two models of fitness devices. The budgeted price per unit for the wireless model is $52 and the budgeted price per unit for the wireless and cellular model is $97. The master budget called for sales of 51,200 wireless models and 12,800 wireless and cellular models during the current year. Actual results showed sales of 38,000 wireless models, with a price of $49 per unit, and 16,200 wireless and cellular models, with a price of $94 per unit. The standard variable cost per unit is $39 for a wireless model and $74 for a wireless and cellular model. Required: a. Compute the sales activity variance for these data. b. Break down the sales activity variance into mix and quantity parts. Complete this question by entering your answers in the tabs below. Required A Required B Break down the sales activity variance into mix and quantity parts. (Do not round intermediate calculations. 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.) Mix variance Quantity variance U < Required A Required B >
Olivet Devices sells two models of fitness devices. The budgeted price per unit for the wireless model is $52 and the budgeted price per unit for the wireless and cellular model is $97. The master budget called for sales of 51,200 wireless models and 12,800 wireless and cellular models during the current year. Actual results showed sales of 38,000 wireless models, with a price of $49 per unit, and 16,200 wireless and cellular models, with a price of $94 per unit. The standard variable cost per unit is $39 for a wireless model and $74 for a wireless and cellular model. Required: a. Compute the sales activity variance for these data. b. Break down the sales activity variance into mix and quantity parts. Complete this question by entering your answers in the tabs below. Required A Required B Break down the sales activity variance into mix and quantity parts. (Do not round intermediate calculations. 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.) Mix variance Quantity variance U < Required A Required B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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Transcribed Image Text:Olivet Devices sells two models of fitness devices. The budgeted price per unit for the wireless model is $52 and the budgeted price
per unit for the wireless and cellular model is $97. The master budget called for sales of 51,200 wireless models and 12,800 wireless
and cellular models during the current year. Actual results showed sales of 38,000 wireless models, with a price of $49 per unit, and
16,200 wireless and cellular models, with a price of $94 per unit. The standard variable cost per unit is $39 for a wireless model and
$74 for a wireless and cellular model.
Required:
a. Compute the sales activity variance for these data.
b. Break down the sales activity variance into mix and quantity parts.
Complete this question by entering your answers in the tabs below.
Required A Required B
Break down the sales activity variance into mix and quantity parts. (Do not round intermediate calculations. 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.)
Mix variance
Quantity variance
U
< Required A
Required B >
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