Mattie\'s Vineyards is a producer and wholesaler of three varieties of white win
ID: 2477263 • Letter: M
Question
Mattie's Vineyards is a producer and wholesaler of three varieties of white wine. Sales data for November are given below: Required: Compute the sales price variance for all three wines. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Compute the activity variance for Mattie's Vineyards for the year. (Indicate the effect of the variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round your intermediate calculations. Round your answer to 2 decimal places.) Compute the mix and quantity variances for Mattie's Vineyards for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round your intermediate calculations. Round your answers to 2 decimal places.)Explanation / Answer
Name of vine (a) Sales Price Varianc e = (AQxBP) - (AQxAP) SPV F/U AQ BQ AP($) BP($) S. Blanc 10560 15200 8.05 7.8 (10560 x 7.80)- (10560x8.05)= 82368 - 85008 = -2640 U Chardonnay 7920 5700 8.5 8.65 (7920 x 8.65)- (7920 x 8.50)= 68508 - 67320 = 1188 F Riesling 14520 17100 7.5 7.15 (14520 x 7.15) - (14520 x 7.50)= 103818 - 108900 = -5082 U Bud. Cont. Margin per unit (B) Activity Variance = (BQ-AQ) x Budgeted contribution Margin per unit BP ($) VC($) CM($) (BP-VC) S. Blanc 7.8 5.8 2 (15200-10560) x 2.00 = 4640 x 2 = 9280 F Chardonnay 8.65 6.4 2.25 (5700 -7920) x 2.25 = -2220 x 2.25 = -4995 U Riesling 7.15 5.15 2 (17100-14520)x 2.00 = 2580 x 2 = 5160 F Mattie 23.6 17.35 6.25 9445 F (C-1) Sales Mix Variance = (RAQxBP) - (AQxAP) SMV S. Blanc (13200 x 7.80)- (10560x8.05)= 102960 - 85008 = 17952 F Chardonnay (4950 x 8.65)- (7920 x 8.50)= 42817.5 - 67320 = -24502.5 U Riesling (14850 x 7.15) - (14520 x 7.50)= 106177.5 - 108900 = -2722.5 U Mattie 251955 261228 -9273 U (C-2) Sales Quantity Varianc e = (BQxBP) - (RAQxAP) SQV S. Blanc (15200 x 7.80)- (13200 x8.05)= 118560 - 106260 = 12300 F Chardonnay (5700 x 8.65)- (4950 x 8.50)= 49305 - 42075 = 7230 F Riesling (17100 x 7.15) - (14850 x 7.50)= 122265 - 111375 = 10890 F Mattie 290130 259710 30420 F BQ SM Factor RAQ a b c(=axb) S. Blanc 15,200 0.8684 13,200 Chardonnay 5,700 0.8684 4,950 Riesling 17,100 0.8684 14,850 38,000 33,000 Terminologies used BQ = Budgeted Quantity AQ = Actual Quantity RAQ = Revised Actual Quanity, Actual Quantity as per BQ mix ratio BP = Budgeted Selling Price AP = Actual Selling Price VC = Variable Cost