Eight-Ball company manufactures three types of pool cues: good, better, and best. The onl difference is...

 

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Eight-Ball company manufactures three types of pool cues: good, better, and best. The onl difference is the materials used in their production. Table 1 provides both budget and actu details of the units and costs associated with the production of the pool cues. Use these da to answer the questions posed in the case. FRODACT Good Bether Best Variance Analysis Eight-Ball in the Corner Pocket Table 1: Eight-Ball Company CASE PROBET 60,000 30,000 10,000 Totals/Average 100,000 The average Bugatedsales price based on actualmbe is $106.00 BUDGET Food Costs-Overhead Food Costs-Operating Expenses Total Materials PRODUCT Good Botter Best A AB AB $2,000,000 $1,000,000 $3,000,000 SALES UNITS BUDGET $2.40 $4.80 $7.20 ARTIAL 55,000 38,500 16,500 110,000 ACTIVAL $2,150,000 $1,050,000 $3,200,000 COSTS PERFOOT/HOUR MM. $2.30 $4.50 $6.00 Budgeted and actual $3.00 per unit for a camrying case Labor $25.00 $25.00 Variable OVH $7.00 $7.50 Variable Operating Expenses Budgeted and actual 10% sales commission and $1.00 per unikt shipping. BUDGET $ 80.00 $120.00 $160.00 $100.00 BUDGET 5.0 FEET/HOURS PER UNET MM. 5.0 5.0 SALES PRICES 10 10 ACTUAL $82.00 $123.00 $167.00 $100.10 5.5 5.5 5.5 0.95 0.95 REQUIREMENTS: 1) Complete the following table. Units Sales Materials Labor Variable Overhead Variable Operating Total Variable Costs Contribution Margin Fixed Costs Income ACTUAL S 110.000 FLEXS VARIANCE Sale Mix Variance Sales Quantity Variance Sales Price Variance ACTUALMIX MIX BUDGETEDS VARSANCE 110.000 2) Assuming no beginning or ending inventories of any kind, calculate the following variances: (Show all your work) Sales Volume Variance BUDG.MX/ BUDGS 110.000 Labor efficiency and price variances Variable Overhead efficiency and spending variances QUANTITY VARANCE 10.000 Materials efficiency and price variances for each of the three materials and the total material variance Fixed Overhead volume and spending variances Variable and Fixed Operating Expense variances STATIC BUDGET 100.000 3) Use the above variances to reconcile the difference between the actual operating income and the static budget operating Income. If any of the above variances are not used, explain why. 4) Assume the total fine pool cue market was anticipated to be 1,000,000 units. The actual total market size was only 880,000 units. Explain Eight-Ball Company's Quantity Variance in terms of market size and market share. 5) Discuss any computational similarities between the above variances and the calculations involved in the strategic analysis of operating income (growth component, price-recovery component, and productivity component). Eight-Ball company manufactures three types of pool cues: good, better, and best. The onl difference is the materials used in their production. Table 1 provides both budget and actu details of the units and costs associated with the production of the pool cues. Use these da to answer the questions posed in the case. FRODACT Good Bether Best Variance Analysis Eight-Ball in the Corner Pocket Table 1: Eight-Ball Company CASE PROBET 60,000 30,000 10,000 Totals/Average 100,000 The average Bugatedsales price based on actualmbe is $106.00 BUDGET Food Costs-Overhead Food Costs-Operating Expenses Total Materials PRODUCT Good Botter Best A AB AB $2,000,000 $1,000,000 $3,000,000 SALES UNITS BUDGET $2.40 $4.80 $7.20 ARTIAL 55,000 38,500 16,500 110,000 ACTIVAL $2,150,000 $1,050,000 $3,200,000 COSTS PERFOOT/HOUR MM. $2.30 $4.50 $6.00 Budgeted and actual $3.00 per unit for a camrying case Labor $25.00 $25.00 Variable OVH $7.00 $7.50 Variable Operating Expenses Budgeted and actual 10% sales commission and $1.00 per unikt shipping. BUDGET $ 80.00 $120.00 $160.00 $100.00 BUDGET 5.0 FEET/HOURS PER UNET MM. 5.0 5.0 SALES PRICES 10 10 ACTUAL $82.00 $123.00 $167.00 $100.10 5.5 5.5 5.5 0.95 0.95 REQUIREMENTS: 1) Complete the following table. Units Sales Materials Labor Variable Overhead Variable Operating Total Variable Costs Contribution Margin Fixed Costs Income ACTUAL S 110.000 FLEXS VARIANCE Sale Mix Variance Sales Quantity Variance Sales Price Variance ACTUALMIX MIX BUDGETEDS VARSANCE 110.000 2) Assuming no beginning or ending inventories of any kind, calculate the following variances: (Show all your work) Sales Volume Variance BUDG.MX/ BUDGS 110.000 Labor efficiency and price variances Variable Overhead efficiency and spending variances QUANTITY VARANCE 10.000 Materials efficiency and price variances for each of the three materials and the total material variance Fixed Overhead volume and spending variances Variable and Fixed Operating Expense variances STATIC BUDGET 100.000 3) Use the above variances to reconcile the difference between the actual operating income and the static budget operating Income. If any of the above variances are not used, explain why. 4) Assume the total fine pool cue market was anticipated to be 1,000,000 units. The actual total market size was only 880,000 units. Explain Eight-Ball Company's Quantity Variance in terms of market size and market share. 5) Discuss any computational similarities between the above variances and the calculations involved in the strategic analysis of operating income (growth component, price-recovery component, and productivity component).

Answer rating: 100% (QA)

The correct answer to the EightBall Company variance analysis case is as follows 1 Complete the following table Type of variance Units Sales price Materials Labor Variable overhead Fixed overhead Tota... View the full answer