Product X Product Y Expected total industry sales (units) 76,800 136,000 Expected S Company sales (units) 7,680 34,000 Budgeted selling price per unit 160 200 Budgeted contribution margin per unit 90 125 Actual results for 20x2 included: Product X Product Y Actual industry sales 100,000 145,000 Actual S Company sales 12,000 31,900 Actual selling price (unit) 150 175 Required: 1. Calculate the sales-volume, sales-mix and market-share variances in terms of contribution margins. 2. In your opinion, when a large sales-volume favourable variance could be an issue?
Product X Product Y Expected total industry sales (units) 76,800 136,000 Expected S Company sales (units) 7,680 34,000 Budgeted selling price per unit 160 200 Budgeted contribution margin per unit 90 125 Actual results for 20x2 included: Product X Product Y Actual industry sales 100,000 145,000 Actual S Company sales 12,000 31,900 Actual selling price (unit) 150 175 Required: 1. Calculate the sales-volume, sales-mix and market-share variances in terms of contribution margins. 2. In your opinion, when a large sales-volume favourable variance could be an issue?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The S Company produces and sells two product lines with the following budgeted revenues and expenses:
Product X Product Y
Expected total industry sales (units) 76,800 136,000
Expected S Company sales (units) 7,680 34,000
Budgeted selling price per unit 160 200
Budgeted contribution margin per unit 90 125
Actual results for 20x2 included:
Product X Product Y
Actual industry sales 100,000 145,000
Actual S Company sales 12,000 31,900
Actual selling price (unit) 150 175
Required:
1. Calculate the sales-volume, sales-mix and market-share variances in terms of contribution margins.
2. In your opinion, when a large sales-volume favourable variance could be an issue?
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