Question 1

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows:

What is the contribution margin for the flexible budget? (Round intermediary calculations to the nearest dollar. )

Accepted Answer

Budgeted contribution margin per unit:
 11ea8a5a_a0eb_34e3_a19c_61d83b1391a9_TB5540_00_TB5540_00_TB5540_00

Question 2

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows:

What is the total sales-volume variance in terms of the contribution margin?

Accepted Answer

Budgeted contribution margin per unit:
 11ea8a5a_a0ec_6d6b_a19c_5ba0ebd69f8d_TB5540_00_TB5540_00_TB5540_00 Total sales-volume variance in terms of the contribution margin
= $6,604,000 - $4,680,000 = $1,924,000 favorable

Question 3

Additional insight can be gained by dividing the sales-volume variance into the sales-mix variance and the sales-quantity variance.

Accepted Answer

This statement is true. The sales-volume variance can be broken down into two components: the sales-mix variance (the change in the proportion of products sold) and the sales-quantity variance (the change in the actual number of products sold). Analyzing these two variances separately can provide insights into factors affecting sales and help identify opportunities for improvement.

Question 4

The sales-mix variance can be explained in terms of the budgeted contribution margin per composite unit of the sales mix.

Accepted Answer

The sales-mix variance is a measure of the impact on profit or contribution margin resulting from a deviation in the actual sales mix from the budgeted sales mix. It can be calculated by comparing the actual contribution margin per composite unit to the budgeted contribution margin per composite unit. Therefore, the sales-mix variance can be explained in terms of the budgeted contribution margin per composite unit of the sales mix.

Question 5

The market-share variance is the difference in budgeted contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

Accepted Answer

The definition of market-share variance is accurately described as the difference in budgeted contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

Question 6

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows:

What is the total sales-mix variance in terms of the contribution margin? (Round any intermediary calculations two decimal places. )

Accepted Answer

Sales mix calculations:
Budgeted Victor = 6,000 / 30,000 = 0.20
Budgeted House-mate = 24,000 / 30,000 = 0.80
Actual Victor = 5500 / 44,500 = 0.12
Actual House-mate = 39,000 / 44,500 = 0.88
Sales mix variance:
 11ea8a5a_a0ed_a5f3_a19c_917c0c30d179_TB5540_00_TB5540_00_TB5540_00

Question 7

A favorable sales-mix variance arises when the actual sales-mix percentage exceeds the budgeted sales-mix percentage.

Accepted Answer

A favorable sales-mix variance occurs when the actual sales mix results in more profit than the budgeted sales-mix. This occurs when the actual sales-mix percentage exceeds the budgeted sales-mix percentage.

Question 8

Managers can gain more insight about the static-budget variance by subdividing it into the flexible-budget variance and the sales-volume variance.

Accepted Answer

Subdividing the static-budget variance into the flexible-budget variance and the sales-volume variance can provide managers with more information about the causes of the variance. The flexible-budget variance measures the difference between the flexible budget and the actual results, while the sales-volume variance measures the difference between the flexible budget and the static budget, and reflects the impact of changes in sales volume on the variance.

Question 9

The sales-mix variance is the difference between budgeted contribution margin for the actual sales mix and the budgeted contribution margin for the budgeted sales mix.

Accepted Answer

This is the correct definition of sales-mix variance.

Question 10

A composite unit is a hypothetical unit with weights based on the mix of individual units.

Accepted Answer

A composite unit is indeed a hypothetical unit with weights based on the mix of individual units.

Question 11

The Corata Appliance Manufacturing Corporation manufactures two vacuum cleaners,the Standard and the Super.The following information was gathered about the two products:

What is the total sales-quantity variance in terms of the contribution margin? (Round intermediary calculations to two decimal places. )

Accepted Answer

Sales mix calculations:
Standard = 2700 / (2700 + 700)= 0.79
Super = 700 / (2700 + 700)= 0.21
Sales quantity variance:
 11ea8a5a_a0ea_4a7e_a19c_5bd06aa2e992_TB5540_00_TB5540_00_TB5540_00

Question 12

The market-share variance is the difference in actual contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

Accepted Answer

The market-share variance is the difference in budgeted contribution margin for actual
market size in units caused solely by actual market share being different from budgeted
market share.

Question 13

The flexible-budget variance is the difference between an actual result and the flexible-budget amount based on the level of output actually achieved in the budget period.

Accepted Answer

This is correct. The flexible-budget variance is calculated by subtracting the flexible-budget amount based on the actual level of output achieved from the actual result.

Question 14

The sales quantity variance is the difference between budgeted contribution margin based on actual units sold of all products at the budgeted mix,and contribution margin in the flexible budget.

Accepted Answer

The sales quantity variance is the difference between budgeted contribution margin based on actual units sold of all products at the budgeted mix,and contribution margin in the static budget.

Question 15

The Corata Appliance Manufacturing Corporation manufactures two vacuum cleaners,the Standard and the Super.The following information was gathered about the two products:

What is the total sales-mix variance in terms of the contribution margin? (Round intermediary calculations to two decimal places. )

Accepted Answer

Sales mix calculations:
Budgeted Standard = 2700 / (2700 + 600)= 0.82
Budgeted Super = 600 / (2700 + 600)= 0.18
Actual Standard = 3000 / (3000 + 1400)= 0.68
Actual Super = 1400 / (3000 + 1400)= 0.32
Sales mix variance:
 11ea8a5a_a0ea_bfb0_a19c_5f4c2acf7ec1_TB5540_00_TB5540_00_TB5540_00

Question 16

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows:

What is the total sales-quantity variance in terms of the contribution margin? (Round any intermediary calculations two decimal places. )

Accepted Answer

Budgeted sales-mix percentage:
 11ea8a5a_a0ec_bb8e_a19c_819a2e7f822b_TB5540_00_TB5540_00_TB5540_00 Actual sales-mix percentage:
 11ea8a5a_a0ec_e29f_a19c_1f51cb0c80b2_TB5540_00_TB5540_00_TB5540_00 11ea8a5a_a0ed_09b0_a19c_87a316331c76_TB5540_00_TB5540_00_TB5540_00

Question 17

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows:

What is the total flexible-budget variance in terms of the contribution margin? (Round intermediary calculations to the nearest dollar. )

Accepted Answer

Budgeted contribution margin per unit:
 11ea8a5a_a0eb_d128_a19c_c199c041b185_TB5540_00_TB5540_00_TB5540_00 Total flexible-budget variance in terms of the contribution margin
= $5,870,800 - $5,530,000 = $340,800 unfavorable

Question 18

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows:

What is the total static-budget variance in terms of the contribution margin?

Accepted Answer

Total static-budget variance in terms of the contribution margin
= $4,720,000 - $6,040,000 = $1,320,000 favorable

Question 19

The static-budget variance is the difference between an actual result and the corresponding budgeted amount in the static budget.

Accepted Answer

This statement is true. The static-budget variance compares actual results to the budgeted amount in the static budget, which is a fixed budget based on anticipated levels of activity.

Question 20

The sales-quantity variance occurs in a multi-product company from a change in the sales mix.

Accepted Answer

It occurs from a change in volume of sales,independent of any change in the sales-mix.

Quiz 14: Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows: What is the total sales-volume variance in terms of the contribution margin?

Additional insight can be gained by dividing the sales-volume variance into the sales-mix variance and the sales-quantity variance.

The sales-mix variance can be explained in terms of the budgeted contribution margin per composite unit of the sales mix.

The market-share variance is the difference in budgeted contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

A favorable sales-mix variance arises when the actual sales-mix percentage exceeds the budgeted sales-mix percentage.

Managers can gain more insight about the static-budget variance by subdividing it into the flexible-budget variance and the sales-volume variance.

The sales-mix variance is the difference between budgeted contribution margin for the actual sales mix and the budgeted contribution margin for the budgeted sales mix.

A composite unit is a hypothetical unit with weights based on the mix of individual units.

The market-share variance is the difference in actual contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

The flexible-budget variance is the difference between an actual result and the flexible-budget amount based on the level of output actually achieved in the budget period.

The sales quantity variance is the difference between budgeted contribution margin based on actual units sold of all products at the budgeted mix,and contribution margin in the flexible budget.

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows: What is the total static-budget variance in terms of the contribution margin?

The static-budget variance is the difference between an actual result and the corresponding budgeted amount in the static budget.

The sales-quantity variance occurs in a multi-product company from a change in the sales mix.