Springwater Brewery has two main products: premium and regular ale. Its operating results and master budget for 20XX (000s omitted) follow: Barrels Sales Variable expenses Contribution margin Fixed expenses Operating income Operating Results of 20xx Regular Premium 210 $ 35,700 18,900 $ 16,800 12,000 $ 4,800 630 $78,750 53,550 $ 25,200 8,000 $ 17,200 Total 840 $ 114,450 72,450 $ 42,000 20,000 $ 22,000 Master Budget for 20xx Regular 390 Premium 260 $ 41,600 23,400 $ 18,200 12,000 $ 6,200 Required: Calculate the following 1 Selling price variances for the period for each product and for the firm. 2. Soles volume variances for the period for each product and for the firm. 3. Sales quantity variances for each product and the firm. $ 50,700 33,150 $ 17,550 8,000 $9,550 Total 650 $92,300 56,550 $ 35,750 20,000 $ 15,750 Pam Kuder, CEO, expected the total industry sales to be 1,300,000 barrels during the period. After the year, Mark Goldfeder, the controller, reported that the total sales for the industry were 1,400,000 barrels.
Springwater Brewery has two main products: premium and regular ale. Its operating results and master budget for 20XX (000s omitted) follow: Barrels Sales Variable expenses Contribution margin Fixed expenses Operating income Operating Results of 20xx Regular Premium 210 $ 35,700 18,900 $ 16,800 12,000 $ 4,800 630 $78,750 53,550 $ 25,200 8,000 $ 17,200 Total 840 $ 114,450 72,450 $ 42,000 20,000 $ 22,000 Master Budget for 20xx Regular 390 Premium 260 $ 41,600 23,400 $ 18,200 12,000 $ 6,200 Required: Calculate the following 1 Selling price variances for the period for each product and for the firm. 2. Soles volume variances for the period for each product and for the firm. 3. Sales quantity variances for each product and the firm. $ 50,700 33,150 $ 17,550 8,000 $9,550 Total 650 $92,300 56,550 $ 35,750 20,000 $ 15,750 Pam Kuder, CEO, expected the total industry sales to be 1,300,000 barrels during the period. After the year, Mark Goldfeder, the controller, reported that the total sales for the industry were 1,400,000 barrels.
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.
Question
Transcribed Image Text:Springwater Brewery has two main products: premium and regular ale. Its operating results and master budget for 20XX (000s
omitted) follow:
Barrels
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income
Operating Results of 20XX
Regular
630
$ 78,750
53,550
$ 25,200
8,000
$ 17,200
Premium
210
$ 35,700
18,900
$ 16,800
12,000
$ 4,800
Total
840
$ 114,450
72,450
$ 42,000
20,000
$ 22,000
Master Budget for 20XX
Regular
390
$ 50,700
33,150
$ 17,550
8,000
$ 9,550
Premium
260
$ 41,600
23,400
$ 18,200
12,000
$ 6,200
Required:
Calculate the following:
1. Selling price variances for the period for each product and for the firm.
2. Sales volume variances for the period for each product and for the firm.
Total
650
$ 92,300
56,550
$ 35,750
20,000
$ 15,750
Pam Kuder, CEO, expected the total industry sales to be 1,300,000 barrels during the period. After the year, Mark Goldfeder, the
controller, reported that the total sales for the industry were 1,400,000 barrels.
3. Sales quantity variances for each product and the firm.
4. Sales mix variances for the period for each product and for the firm
5. The sum of the sales quantity variance and sales mix variance Also, verify that this total equals the sales volume variance
6. Market size variance for the period.
7 Market share variance for the period.
8. The sum of the market size variance and market share variance. Also, verify that this total equals the sales quantity variance
Transcribed Image Text:(Enter your answers in thousands of dollars.)
1. Selling price variance - Premium
Selling price variance - Regular
Total selling price variance
2. Sales volume variance - Premium
Sales volume variance - Regular
Total sales volume variance
3. Sales quantity variances - Premium
Sales quantity variances - Regular
Total sales quantity variance
4. Sales mix variance - Premium
Sales mix variance - Regular
Total sales mix variance
5.
Sales volume variance
6. Market size variance
7. Market share variance
8. Sales quantity variance
SSSSSSSS
$
S
2,100 Favorable
3,150 Unfavorable
1,050 Unfavorable
8,000 Unfavorable
31,200 Favorable
23,200 Favorable
12,160 Favorable
14,820 Favorable
26,980 Favorable
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