25 May Question 156. Aromatic Coffee, Inc., sells two types of coffee, Colombian a
Question
156. Aromatic Coffee, Inc., sells two types of coffee, Colombian and Blue Mountain. The monthly budget for U.S. coffee sales is based on a combination of last year’s performance, a forecast of industry sales, and the company’s expected share of the U.S. market. The following information is provided for March:
Actual Budget
Colombian Blue Mountain Colombian Blue Mountain
SALES IN POUNDS 7,000 LBS. 8,000 LBS. 6,400 LBS. 8,600 LBS
PRICE PER POUND $25 $30 $25 $30
Variable cost per pound 11 14 12 13
CONTRIBUTION MARGIN $14 $16 $13 $17
Budgeted and actual fixed corporate-sustaining costs are $60,000 and $72,000, respectively.
Required:
a. Calculate the actual contribution margin for the month.
b. Calculate the contribution margin for the static budget.
c. Calculate the contribution margin for the flexible budget.
d. Determine the total static-budget variance, the total flexible-budget variance, and the total sales-volume variance in terms of the contribution margin.
157. Harry’s Electronics manufactures TVs and VCRs. During February, the following activities occurred:
TVs VCRs
BUDGETED UNITS SOLD 17,640 66,360
Budgeted contribution margin per unit $90 $156
Actual units sold 20,000 80,000
Actual contribution margin per unit $100 $158
Required:
Compute the following variances in terms of the contribution margin.
a. Determine the total sales-mix variance.
b. Determine the total sales-quantity variance.
c. Determine the total sales-volume variance.
158. Speedy Printing manufactures soft cover books. For January, the following information is available:
Budgeted market size (units) 125,000
Budgeted market share 18%
Budgeted average contribution margin per unit $1.20
ACTUAL MARKET SIZE (UNITS) 100,000
Actual market share 19%
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