# Aqu x ap aqu x sp sqa x sp bqa x bp dl 4900 x 3150

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Chapter 2 / Exercise 61
Applied Calculus for the Managerial, Life, and Social Sciences
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Aqu X Ap Aqu X Sp Sqa X Sp Bqa X Bp DL 4,900 X \$31.50 4,900 X \$30 \$154,350 \$147,000 \$143,318 \$145,500 (\$7,350.00) (\$3,682.50) \$2,182.50 Unfavorable Unfavorable Favorable DML Rate Variance DML Efficiency Variance DM Sales-Volume Variance (\$11,032.50) (\$11,032.50) \$2,182.50 Unfavorable Favorable DML Flexible Budget Variance DML Sales-Volume Variance (\$8,850.00) (\$8,850.00) Unfavorable DML Static Budget Variance When continuous improvement is used, standards are set tighter in every future period. 9,850 X 9.702 X \$4.50 10,000 X 9.702 X \$4.50 9,850 X .485 X \$30 10,000 X.485 X \$30 approach. In January 2012, the standard direct material cost is \$45 per unit and the standard direct manufacturing labor cost is \$15 per unit. Due to more efficient operations, the standard quantities for February 2012 are set at 0.980 of the standard quantities for January. In March 2012, the standard quantities are set at 0.990 of the standard quantities for February 2012. Assume the 2012 are .980 of the January standard are .990 of the February standard
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Chapter 2 / Exercise 61
Applied Calculus for the Managerial, Life, and Social Sciences
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Exercise 7-20: Flexible-budget and sales volume variances, market-share and market-size variances. Given: Marron, Inc., produces the basic fillings used in many popular frozen desserts and treats -- vanilla and chocolate ice creams, puddings, meringues, and fudge. Marron uses standard costing and carries over no inventory from one month to the next. The ice-cream product group's results for June 2012 were as follows: Performance Report Actual Static for 6/1/2012 Results Budget Units (pounds) \$5.40 355,000 345,000 \$5.45 Revenues \$3.55 \$1,917,000 \$1,880,250 \$3.50 Var. mfg. costs \$1.85 1,260,250 1,207,500 \$1.95 Contribution margin \$656,750 \$672,750 \$1.85 \$1.95 Ted Levine, the business manager for ice-cream products, is pleased that more pounds of ice cream were sold than budgeted and that revenues were up. Unfortunately, variable manufacturing costs Levine would also like to analyze how the company is performing compared to the overall market for ice-cream products. He knows that the expected total market for ice-cream products was 1,150,000 1,109,375 1. Calculate the static-budget variance in units, revenues, variable manufacturing costs, and contribution margin. What percentage is each static-budget variance relative to its static-budget amount? 2. Break down each static-budget variance into a flexible-budget variance and a sales-volume variance. Actual Static SBV Operating Flexible Sales Budget as a % of Income Budget Adjusted Volume Static Variance the Static Actual Variance Budget Variance Budget (SBV) Budget Units sold 355,000 0 355,000 10,000 345,000 10,000 Sales \$1,917,000 (\$17,750) \$1,934,750 \$54,500 \$1,880,250 \$36,750 Variable manufacturing costs 1,260,250 (17,750) 1,242,500 (35,000) 1,207,500 (52,750) -4.37% Contribution Margin \$656,750 (\$35,500) \$692,250 \$19,500 \$672,750 (\$16,000) -2.38% Actual SP/unit \$5.40 (\$35,500) \$19,500 \$5.45 Budgeted SP/unit Actual CM/unit \$1.85 Unfavorable Favorable \$1.95 Budgeted CM/unit Flexible-Budget Variance Sales-Volume Variance (\$16,000) (\$16,000) Unfavorable Static-Budget Variance 2.90% 1.95%
3. Calculate the selling price variance.
4. Calculate the market-share and market-size variance