Berkshire Toy Company Case - 1 i Budgeted Sales Mix = 238,000 280,000 =.85 Actual Sales Mix = 174,965 220,127 =.7948 Master 280,000 units x.85 x $49 =

Berkshire Toy Company Case - 1 i Budgeted Sales Mix =...

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1) i) Budgeted Sales Mix = 238,000 / 280,000 = .85 Actual Sales Mix = 174,965 / 220,127 = .7948 Master: 280,000 units x .85 x $49 = $11,662,000 Flexible: 220,127 units x .85 x $49 = $9,168,289.55 Expected Revenues: 220,127 units x .7948 x $49 = $8,573,285 Actual: 220,127 units x .7948 x $49 = $8,573,285 (Sales) Activity Variance = $2,493,710.45 U Revenue Variance = $595,004.55 U Mix/Share Variance= $595,004.55 U Price Variance = $0 Total Variance = $3,088,715 U ii) Budgeted Sales Mix = 42,000 / 280,000 = .15 Actual Sales Mix = 45,162 / 220,127 = .2048 Master: 280,000 units x .15 x $32 = $1,344,000 Flexible: 220,127 units x .15 x $32 = $1,056,609.6 Expected Revenues: 220,127 units x .2048 x $32 = $1,445,184 Actual: 220,127 units x .2048 x $32 = $1,445,184 (Sales) Activity Variance = $287,390.4 U Revenue Variance = $388,574.4 F Mix/Share Variance = $388,574.4 F Price Variance = $0 Total Variance = $101,184 F 2) David Hall’s Bonus = 20% of net materials price variance Net Materials Price Variance = 20,428 + 25,181 + 48,183 + 6,317 – 26,946 = $73,163 F Bonus = 73,163 x .2 = $14,632.6 Rita Smith’s Bonus = 10% of the excess actual net revenues over master budget net revenues Actual Net Revenue = 14,446,487 – 1,859,594 – 5,023,192 = $7,563,701 Budgeted Net Revenue = 13,006,000 – 1,218,280 – 4,463,000 = $7,324,720 Excess = 7,563,701 – 7,324,720 = $238,981 Bonus = 238,981 x .1 = $23,898.1 Bill Wilford’s Bonus = 3% of several net variances Production Efficiency Variance = 5,564 + 1,926 + 43,294 + 74,188 + 144
-2,328 + 466,638 + 181,639 = $771,065 U Labor Rate Variance = $76,329 U

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