Olivet Devices sells two models of fitness devices. The budgeted price per unit for the wireless model is $56 and the budgeted price per unit for the wireless and cellular model is $101. The master budget called for sales of 54,400 wireless models and 13,600 wireless and cellular models during the current year. Actual results showed sales of 40,000 wireless models, with a price of $53 per unit, and 17,400 wireless and cellular models, with a price of $98 per unit. The standard variable cost per unit is $43 for a wireless model and $78 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.( mix Variance=? Quantity Variance=?)
Olivet Devices sells two models of fitness devices. The budgeted price per unit for the wireless model is $56 and the budgeted price per unit for the wireless and cellular model is $101. The master budget called for sales of 54,400 wireless models and 13,600 wireless and cellular models during the current year. Actual results showed sales of 40,000 wireless models, with a price of $53 per unit, and 17,400 wireless and cellular models, with a price of $98 per unit. The standard variable cost per unit is $43 for a wireless model and $78 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.( mix Variance=? Quantity Variance=?)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $56
and the budgeted price per unit for the
wireless and cellular model is $101.
The master budget called for sales of
54,400 wireless models and 13,600
wireless and cellular models during the
current year. Actual results showed
sales of 40,000 wireless models, with a
price of $53 per unit, and 17,400
wireless and cellular models, with a
price of $98 per unit. The standard
variable cost per unit is $43 for a
wireless model and $78 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.(
mix Variance=? Quantity Variance=?)
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