This is the only information provided Columbia Coco Beans Inc. sells two types o
ID: 2537059 • Letter: T
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This is the only information provided
Columbia Coco Beans Inc. sells two types of coffee, Regular and Decaf. The monthly budget for Canadian coffee sales is based on a combination of last year's performance, a forecast of industry sales, and the company's expected share of the Canadian market. The following information is provided for October: Budgeted Actual Regular Decaf Regular Decaf Price per kilogram $50 $60 $52 $60 Variable cost per kilogram 24 26 24 28 Contribution margin $26 $34 $28 $32 Sales (in kg) 4,000 4,500 3,700 4,800 Budgeted fixed costs are $58,000. Actual fixed costs are $62,000. Required: 1) Calculate the static-budget, flexible-budget and sales-volume variances for the contribution margin, for the company for October.
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Columbia Coco Beans Inc. sells two types of coffee, Regular and Decaf. The monthly budget for Canadian coffee sales is based on a combination of last year's performance, a forecast of industry sales, and the company's expected share of the Canadian market. The following information is provided for October:
Required:
1) Calculate the static-budget, flexible-budget and sales-volume variances for the contribution margin, for the company for October.
Budgeted fixed costs are $58,000. Actual fixed costs are $62,000.
Budgeted Budgeted Actual Actual Regular Decaf Regular Decaf Price per kilogram $ 50 $ 60 $ 52 $ 60 Variable cost per Kilogram 24 26 24 26 Contribution Margin $ 26 $ 34 $ 28 $ 32 Sales (in kg) 4,000 4,500 3,700 4,800Explanation / Answer
Budgeted Budgeted Actual Actual Type of Product Regular Decaf Regular Decaf Price per kilogram 50 60 52 60 Variable cost per Kilogram 24 26 24 28 Contribution Margin 26 34 28 32 Sales (in kg) 4,000 4,500 3,700 4,800 Static Budget: Regular Decaf Total Sales Volume 4,000 4,500 Sale Revenue 200000 270000 470000 Less: Variable Cost 96000 117000 213000 Contribution Margin 104000 153000 257000 Less: Fixed Cost 58000 Net Operating Income 199000 Flexible Budget: Regular Decaf Total Sales Volume 3,700 4,800 Sale Revenue 185000 288000 473000 Less: Variable Cost 88800 124800 213600 Contribution Margin 96200 163200 259400 Less: Fixed Cost 58000 Net Operating Income 201400 Sales Volume Variance: (Actual Units Sold-Budgeted Unit Sold)*Standard Contribution Margin Regular Decaf Actual Units 3,700 4,800 Budgeted Units 4,000 4,500 Difference -300 300 Standard Contribution Margin 26 34 Variance -7800 10200 Adverse Favourable Total Variance 2400 Favourable
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