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Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild, and sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea. The following information is provided for the month of May: Price per kg Variable cost /kg Cont. margin Budgeted Strong A. $150 unfavourable $2.00 B. $0 C. $150 favourable D. $300 favourable E. $450 favourable 1.00 $1.00 sales-mix variance for contribution margin? 2,000 Budgeted Mild Sales (in kg) Budgeted fixed costs are $1,750. Actual fixed costs are $2,000. What is the STP total $3.00 1.50 $1.50 1,500 Actual Strong $2.50 1.00 $1.50 1,700 Actual Mild $2.50 2.00 $0.50 1,800

Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild, and sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea. The following information is provided for the month of May: Price per kg Variable cost /kg Cont. margin Budgeted Strong A. $150 unfavourable $2.00 B. $0 C. $150 favourable D. $300 favourable E. $450 favourable 1.00 $1.00 sales-mix variance for contribution margin? 2,000 Budgeted Mild Sales (in kg) Budgeted fixed costs are $1,750. Actual fixed costs are $2,000. What is the STP total $3.00 1.50 $1.50 1,500 Actual Strong $2.50 1.00 $1.50 1,700 Actual Mild $2.50 2.00 $0.50 1,800

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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Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild, and sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea. The following information is provided for the month of May: Price per kg Variable cost /kg Cont. margin Budgeted Strong $2.00 A. $150 unfavourable B. $0 C. $150 favourable D. $300 favourable E. $450 favourable 1.00 $1.00 2,000 sales-mix variance for contribution margin? Budgeted Mild $3.00 Sales (in kg) Budgeted fixed costs are $1,750. Actual fixed costs are $2,000. What is the STP total 1.50 $1.50 1,500 Actual Strong $2.50 1.00 $1.50 1,700 Actual Mild $2.50 2.00 $0.50 1,800
Transcribed Image Text:Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild, and sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea. The following information is provided for the month of May: Price per kg Variable cost /kg Cont. margin Budgeted Strong $2.00 A. $150 unfavourable B. $0 C. $150 favourable D. $300 favourable E. $450 favourable 1.00 $1.00 2,000 sales-mix variance for contribution margin? Budgeted Mild $3.00 Sales (in kg) Budgeted fixed costs are $1,750. Actual fixed costs are $2,000. What is the STP total 1.50 $1.50 1,500 Actual Strong $2.50 1.00 $1.50 1,700 Actual Mild $2.50 2.00 $0.50 1,800
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