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

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1) i)Budgeted Sales Mix = 238,000 / 280,000 = .85Actual Sales Mix = 174,965 / 220,127 = .7948Master:280,000 units x .85 x $49 = $11,662,000Flexible:220,127 units x .85 x $49 = $9,168,289.55Expected Revenues:220,127 units x .7948 x $49 = $8,573,285Actual:220,127 units x .7948 x $49 = $8,573,285(Sales) Activity Variance = $2,493,710.45URevenue Variance = $595,004.55UMix/Share Variance= $595,004.55UPrice Variance = $0Total Variance = $3,088,715 Uii)Budgeted Sales Mix = 42,000 / 280,000 = .15Actual Sales Mix = 45,162 / 220,127 = .2048Master:280,000 units x .15 x $32 = $1,344,000Flexible:220,127 units x .15 x $32 = $1,056,609.6Expected Revenues:220,127 units x .2048 x $32 = $1,445,184Actual:220,127 units x .2048 x $32 = $1,445,184(Sales) Activity Variance = $287,390.4URevenue Variance = $388,574.4FMix/Share Variance = $388,574.4FPrice Variance = $0Total Variance = $101,184F2)David Hall’s Bonus = 20% of net materials price varianceNet Materials Price Variance = 20,428 + 25,181 + 48,183 + 6,317 – 26,946= $73,163 FBonus = 73,163 x .2 = $14,632.6Rita Smith’s Bonus = 10% of the excess actual net revenues over master budget netrevenuesActual Net Revenue = 14,446,487 – 1,859,594 – 5,023,192= $7,563,701Budgeted Net Revenue = 13,006,000 – 1,218,280 – 4,463,000= $7,324,720Excess = 7,563,701 – 7,324,720 = $238,981Bonus = 238,981 x .1 = $23,898.1Bill Wilford’s Bonus = 3% of several net variancesProduction Efficiency Variance = 5,564 + 1,926 + 43,294 + 74,188 + 144
-2,328 + 466,638 + 181,639= $771,065ULabor Rate Variance = $76,329U

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Term
Spring
Professor
NEWMAN
Tags
Variance, Revenue, production manager, Bill Wilford

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