Good Morning (Pty.) Ltd. (Good Morning) is a cereal manufacturer located in Gauteng. The entity has...

 

 

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Good Morning (Pty.) Ltd. ("Good Morning") is a cereal manufacturer located in Gauteng. The entity has a 30 April financial yearend. Good Morning manufactures three types of cereals: Indulge, Prime and Hero. Indulge is a cereal with the main goal of providing a delicious taste. Prime is aimed at the health-conscious consumers whilst Hero targets the kids' market. All three cereal types are sold in 1 kg-packets per unit to consumers. At the start of the second quarter of the 2023-financial year, the actual results of the first quarter were used and adjusted for any inefficiencies and projected changes (for example, upcoming known price increases). This resulted in the budgeted figures for the second quarter, which were as follow: Indulge (per unit) R17.60 Direct material Direct labour Variable overheads Selling price R15.80 R4.30 R45 Direct material Direct labour Prime (per unit) R12.50 R9.40 R1.90 R43 Indulge (per unit) R16.60 R16.10 It was estimated that Good Morning will sell 48 000 Indulges per month; 52 000 Primes per month and 63 000 Heros per month. Hero (per unit) R14.11 R13.70 R2.20 At the end of the second quarter, Good Morning's management accountants finalised the actual results for the quarter which indicated the following: R37 Prime (per unit) R13.70 R9.00 Hero (per unit) R13.00 R14.00 Variable overheads Sales quantity ● R3.90 ● 142 500 units REQUIRED: R2.50 154 000 units Upon inspection of the sales invoices, it was noted that consumers were willing to spend the following on each product: R47 per Indulge; R44.50 per Prime and R33 per Hero. R2.00 Additional information: Although the direct labour cost was budgeted to be R53 per hour, the actual direct labour cost per hour amounted to R55 per hour. Direct labour hours are used as the allocation basis for overheads by Good Morning (Pty.) Ltd. No opening inventory nor closing inventory are applicable to any of the presented periods. 195 000 units Calculate Good Morning (Pty.) Ltd.'s sales mix contribution variance for the entity's second quarter of the 2023-financial year. Utilise the weighted average contribution where applicable. Good Morning (Pty.) Ltd. ("Good Morning") is a cereal manufacturer located in Gauteng. The entity has a 30 April financial yearend. Good Morning manufactures three types of cereals: Indulge, Prime and Hero. Indulge is a cereal with the main goal of providing a delicious taste. Prime is aimed at the health-conscious consumers whilst Hero targets the kids' market. All three cereal types are sold in 1 kg-packets per unit to consumers. At the start of the second quarter of the 2023-financial year, the actual results of the first quarter were used and adjusted for any inefficiencies and projected changes (for example, upcoming known price increases). This resulted in the budgeted figures for the second quarter, which were as follow: Indulge (per unit) R17.60 Direct material Direct labour Variable overheads Selling price R15.80 R4.30 R45 Direct material Direct labour Prime (per unit) R12.50 R9.40 R1.90 R43 Indulge (per unit) R16.60 R16.10 It was estimated that Good Morning will sell 48 000 Indulges per month; 52 000 Primes per month and 63 000 Heros per month. Hero (per unit) R14.11 R13.70 R2.20 At the end of the second quarter, Good Morning's management accountants finalised the actual results for the quarter which indicated the following: R37 Prime (per unit) R13.70 R9.00 Hero (per unit) R13.00 R14.00 Variable overheads Sales quantity ● R3.90 ● 142 500 units REQUIRED: R2.50 154 000 units Upon inspection of the sales invoices, it was noted that consumers were willing to spend the following on each product: R47 per Indulge; R44.50 per Prime and R33 per Hero. R2.00 Additional information: Although the direct labour cost was budgeted to be R53 per hour, the actual direct labour cost per hour amounted to R55 per hour. Direct labour hours are used as the allocation basis for overheads by Good Morning (Pty.) Ltd. No opening inventory nor closing inventory are applicable to any of the presented periods. 195 000 units Calculate Good Morning (Pty.) Ltd.'s sales mix contribution variance for the entity's second quarter of the 2023-financial year. Utilise the weighted average contribution where applicable.

Answer rating: 100% (QA)

To calculate Good Morning Pty Ltds sales mix contribution variance for the second quarter of the 2023financial year we can follow these steps Step 1 Calculate the standard contribution margin per unit ... View the full answer