Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the company’s prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three varieties of soup based on the prior year’s product mix, again adjusted for planned changes for the coming yearIndustry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was
1,140,000 cases.
Required:
a. Determine the sales price and sales activity variances.
b. Break down the sales activity variance into the parts caused by industry volume and market share.
Complete this question by entering your answers in the tabs below.
Determine the sales price and sales activity variances.
Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by
selecting " F " for favorable, or " U " for unfavorable. If there is no effect, do not select either option.
Complete this question by entering your answers in the tabs below.
Break down the sales activity variance into the parts caused by industry volume and market share.
Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by
selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.
Budget (all units and costs in thousands)
Bean 38 cases $1,760 1,190 $ 578 380 $ 190
Tonato 30 cases $3,100 2,41 $ 690 380 $ 31
Vegetable 60cases $ 4,440 3,180 $ 1,260 570 $ 690
Total 120 cases $9,300 6,780 $ 2,520 1,330 $ 1,190 650 $ 540
Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit
Actual (all units and costs in thousands)
Tonato 36 cases $3,100 2,352
Sales-units Sales-dollars Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit
Vegetable 63 cases $ 4,440 3,344 $ 1,096 448 $ 648
Total 117 cases $ 9,002 6,648 $ 2,354 1,314 $1,048 479 $ 570
24 cases $ 1,462 952 $ 51 392 $118
474 274
Industry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was 1,140,000 cases.
Required: a. Determine the sales price and sales activity variances. b.Break down the sales activity variance into the parts caused by industry volume and market share
Complete this question by entering your answers in the tabs below.
Required A
Required B
Determine the sales price and sales activity variances. Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by selecting F for favorable, or u for unfavorable. If there is no effect, do not select either option.
Sales price variance Sales activity variance
U U
Complete this question by entering your answers in the tabs below.
Required A
Required B
Break down the sales activity variance into the parts caused by industry volume and market share. Note: Do not round intermediate calculations. Enter your answers in thousands. Indicate the effect of each variance by selecting F for favorable, or U for unfavorable. If there is no effect, do not select either option.
Market share variance Industry variance
F
U
