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Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars 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 bars 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 July.

Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars 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 bars 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 July.

FINANCIAL ACCOUNTING
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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Complete this question by entering your answers in the tabs below. Required A Required B Determine the sales price and sales activity variances. (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.) Sales price variance Sales activity variance Show Transcribed Text Required A Required B U U Complete this question by entering your answers in the tabs below. Market share variance Industry variance < Required A Break down the sales activity variance into the parts caused by industry volume and market share. (Do not round intermediate calculations. Enter your answers in thousands rounded to 1 decimal place. 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.) $15.0 or $19.0 Required B > U < Required A Required B >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required A Required B Determine the sales price and sales activity variances. (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.) Sales price variance Sales activity variance Show Transcribed Text Required A Required B U U Complete this question by entering your answers in the tabs below. Market share variance Industry variance < Required A Break down the sales activity variance into the parts caused by industry volume and market share. (Do not round intermediate calculations. Enter your answers in thousands rounded to 1 decimal place. 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.) $15.0 or $19.0 Required B > U < Required A Required B >
Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars 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 bars 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 July. Chewy 2,000 bars $220 160 $ 60 40 $ 20 Budget Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Actual Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Chewy 1,500 bars $105 60 $45 38 $ 7 Chunky 2,000 bars $360 280 $ 80 40 $ 40 Chunky 2,000 bars $360 304 $ 56 35 $ 21 Choco-Lite 4,000 bars $880 720 $160 60 $100 Choco-Lite 4,100 bars $880 753 $127 55 $ 72 Total 8,000 bars $1,460 1,160 $ 300 140 $ 160 55 $ 105 Total 7,600 bars $1,345 1,117 $ 228 128 100 47 $ 53 $ Industry volume was estimated at 95.5 million bars for budgeting purposes. Actual industry volume for July was 85.950 million bars. Required: a. Determine the sales price and sales activity variances. b. Break down the sales activity variance into the parts caused by industry volume and market share.
Transcribed Image Text:Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars 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 bars 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 July. Chewy 2,000 bars $220 160 $ 60 40 $ 20 Budget Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Actual Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Chewy 1,500 bars $105 60 $45 38 $ 7 Chunky 2,000 bars $360 280 $ 80 40 $ 40 Chunky 2,000 bars $360 304 $ 56 35 $ 21 Choco-Lite 4,000 bars $880 720 $160 60 $100 Choco-Lite 4,100 bars $880 753 $127 55 $ 72 Total 8,000 bars $1,460 1,160 $ 300 140 $ 160 55 $ 105 Total 7,600 bars $1,345 1,117 $ 228 128 100 47 $ 53 $ Industry volume was estimated at 95.5 million bars for budgeting purposes. Actual industry volume for July was 85.950 million bars. Required: a. Determine the sales price and sales activity variances. b. Break down the sales activity variance into the parts caused by industry volume and market share.
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