Natural Nutrients Bakery of Springfield produces three flavors of cat morsels th

Question

Natural Nutrients Bakery of Springfield produces three flavors of cat morsels that have budgeted and actual sales data for a bag of a dozen of their cat morsels as follows for December 2008: Budgeted Data Actual Data TunaFest ChikBits ChezNips TunaFest ChikBits ChezNips Bags CM per bag S2.50 $4.00 $5.00 Cont. Margin $18,000 $19,200 $%20,000 7,200 4,800 10,800 3,600 7,200 $2.00 $3.00 $7.50 $21,600 S10,800 $54,000 Total Contribution Margin $57,200 $86,400 According to company forecasts, they were budgeting to earn a 25 percent market share in total units (bags) of specially prepared cat treats sold in December 2008 in Springfield, Reliable industry sources indicate that the total number of bags of cat treats sold for December 2008 in Springfield was 72,000. 1. The amount of Natural Nutrients Bakery's sales-volume variance for December 2008 is 2. The sales-quantity variance for December 2008 for Natural Nutrients Bakery is 3. The sales-mix variance for December 2008 for Natural Nutrients Bakery is

Explanation / Answer

Answer: 1 Standard Unit sold Actual Units Sold (Actual Units-Standard Units) Budgeted CM Sales-Volume Variance Tuna                                       7,200                           10,800                       3,600 $                                     2.50 $         9,000.00 (3600*2.5) Chikbits                                       4,800                             3,600                     (1,200) $                                     4.00 $      (4,800.00) (1200*4) ChezNips                                       4,000                             7,200                       3,200 $                                     5.00 $      16,000.00 (33200*5) Total Sales-Volume Variance $      20,200.00 Favourable 2 Standard Unit sold Sales Mix Ratio Note Actual Units Sold Actual Unit to be sold in Standard Sales mix ratio Tuna                                       7,200 0.45 (7200/16000)                                    10,800                   9,720 (21,600*0.45) Chikbits                                       4,800 0.3 (4800/16000)                                       3,600                   6,480 (21,600*0.30) ChezNips                                       4,000 0.25 (4000/16000)                                       7,200                   5,400 (21600*0.25)                                     16,000                                    21,600                 21,600 Actual Unit to be sold in Standard Sales mix ratio Budgeted CM Tuna                                       9,720 $                           2.50 $          24,300.00 Chikbits                                       6,480 $                           4.00 $          25,920.00 ChezNips                                       5,400 $                           5.00 $          27,000.00                                     21,600 $          77,220.00 Budgeted CM $          57,200.00 Sales-Volume Variance $          20,020.00 Favourable 3 Sales Mix Variance i ii Actual Units Sold Actual Unit to be sold in Standard Sales mix ratio Difference (i-ii) Budgeted CM Sales Mix Variance Tuna                                     10,800                             9,720 (21,600*0.45)                                       1,080 $                 2.50 $         2,700.00 (1080*2.5) Chikbits                                       3,600                             6,480 (21,600*0.30)                                    (2,880) $                 4.00 $    (11,520.00) (2880*4) ChezNips                                       7,200                             5,400 (21600*0.25)                                       1,800 $                 5.00 $         9,000.00 (1800*5) Sales Mix Variance $            180.00 Favourable

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