PLS ANSWER ALL THE QUESTIONS CLEARLY AND SHOW YOUR CALCULATIONS STEP BY STEP. Ha

Question

PLS ANSWER ALL THE QUESTIONS CLEARLY AND SHOW YOUR CALCULATIONS STEP BY STEP.

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.

Explanation / Answer

Working: Budgets TVs VCRs Total Budgeted units sold 17640 66360 84000 Budgeted contribution margin per unit $90 $156 Actuals TVs VCRs Total Actual units sold 20000 80000 100000 Actual contribution margin per unit $100 $158 Actuals TVs VCRs Total Actual units sold 20000 80000 100000 Actual contribution margin per unit $100 $158 Actual sales mix of TVs = 20000 / 100000 = 20% Actual sales mix of VCRs = 80000 / 100000 = 80% Budgeted sales mix of TVs = 17640 / 84000 = 21% Budgeted sales mix of VCRs = 66360 / 84000 = 79% a. Mix variance = (Actual sales mix - Budgeted sales mix)*Total actual sales volume * Standard contribution per unit For TVs = (0.20 - 0.21)*100000*90 = $90,000 (A) Fro VCRs = (0.80 - 0.79)*100000 * 156 = $156,000(F) Total = 156000 - 90000 = $66,000 (F) b. Sales quantity variance = (Actual sales volume - Budgeted sales volume) * Standard mix *Contribution per unit For TVs = (100000 - 84000) * 0.21 * 90 = $302,400 For VCRs = (100000-84000) *0.79*156 = $1,971,840 Total = 302400 + 1971840 = $2,274,240 c. Total sales volume variance = (20000 - 17640)*90+(80000 - 66360)*156 = $2,340,240 Verification: Mix + Quantity variance = Total sales volume variance Mix + Quantity variance = 66000+2274240 Total sales volume variance = $2,340,240 Thank you.... Budgets TVs VCRs Total Budgeted units sold 17640 66360 84000 Budgeted contribution margin per unit $90 $156

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