Nomad Company manufactures two types of tablets, 7 and 13 versions. It operates in a very...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Nomad Company manufactures two types of tablets, 7" and 13" versions. It operates in a very competitive market and is always having to review its selling prices to remain ahead of the market. The company operates a standard costing system and relies heavily on variance analysis assessments of its products monthly. The management report for the month of August is as follows: Note Total number of units made and sold 4,600 1 Material price variance 13,800 F 2 Notes: (1) The budgeted total sales volume for the tablets was 5,000 units consisting of 3,000 units of the 7" version and 2,000 units of the 13" version. Actual sales volume was 2,800 units of the 7" version and 1,800 units of the 13" version. Standard sales prices are $450 and for the 7" version and $800 for the 13" version. The actual selling prices were $390 and $920 respectively. The standard contributions for the 7" and the 13" are $120 and $270 respectively. (2) The only reason for this variance as a decrease in the material component, B. Each 7" tablet and 13" tablet made requires one unit of component B, for which the standard cost is $75 per unit. A more advanced version of component B entered the market in the month of July, and this caused a reduction in the cost of Nomad's component in the marketplace. The market price for component B, fell to $70. Nomad Company actually paid $72 for the component. Required: (a) Calculate the following for the month of August, showing all workings clearly: i. The sales volume contribution variance, the sales mix variance, and the sales quantity (11 variance. marks) ii. The material price planning variance and material price operational variance. (9 marks) (b) Explain the reasons why Nomad Co would be interested in the material price planning variance and the material price operational variance. (5 marks) Nomad Company manufactures two types of tablets, 7" and 13" versions. It operates in a very competitive market and is always having to review its selling prices to remain ahead of the market. The company operates a standard costing system and relies heavily on variance analysis assessments of its products monthly. The management report for the month of August is as follows: Note Total number of units made and sold 4,600 1 Material price variance 13,800 F 2 Notes: (1) The budgeted total sales volume for the tablets was 5,000 units consisting of 3,000 units of the 7" version and 2,000 units of the 13" version. Actual sales volume was 2,800 units of the 7" version and 1,800 units of the 13" version. Standard sales prices are $450 and for the 7" version and $800 for the 13" version. The actual selling prices were $390 and $920 respectively. The standard contributions for the 7" and the 13" are $120 and $270 respectively. (2) The only reason for this variance as a decrease in the material component, B. Each 7" tablet and 13" tablet made requires one unit of component B, for which the standard cost is $75 per unit. A more advanced version of component B entered the market in the month of July, and this caused a reduction in the cost of Nomad's component in the marketplace. The market price for component B, fell to $70. Nomad Company actually paid $72 for the component. Required: (a) Calculate the following for the month of August, showing all workings clearly: i. The sales volume contribution variance, the sales mix variance, and the sales quantity (11 variance. marks) ii. The material price planning variance and material price operational variance. (9 marks) (b) Explain the reasons why Nomad Co would be interested in the material price planning variance and the material price operational variance. (5 marks)
Expert Answer:
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
Posted Date:
Students also viewed these accounting questions
-
A company manufactures two types of trucks. Each truck must go through the painting shop and the assembly shop. If the painting shop were completely devoted to painting type 1 trucks, 800 per day...
-
A company manufactures two types of electric hedge trimmers, one of which is cordless. The cord-type trimmer requires 2 hours to make, and the cordless model requires 4 hours. The company has only...
-
A Costa Rican company manufactures two types of coffee: regular and premium, which it sells at a price of $ 120 and $ 200 (per 46 kg bag), respectively. These coffees are prepared from a mixture of...
-
Write a check (Figure 4 - 42) dated June 13, 20XX, to Byron Johnson in the amount of $296.83 for a washing machine, Complete the check stub. Figure 4 - 42 456 456 Amount To For KRA, INC 2596 Jason...
-
Why do advertisers argue about the value of sales promotion versus brand building, and how can those differences be resolved?
-
Use the Chain Rule combined with other differentiation rules to find the derivative of the following functions. y = e 2x (2x - 7) 5
-
The capital structure of Audiology Associates, Inc., at December 31, 2007 , included 5,000 shares of \(\$ 2\) preferred stock and 100,000 shares of common stock. Common shares outstanding during 2008...
-
Describe the channel of distribution for a craft beer from Belgium to your city or town. How many channel levels will be involved? Brewing craft beer is both an art and a science, and Sonia Collin, a...
-
The expected return on HiLo stock is 1 5 . 1 0 percent while the expected return on the market is 1 3 . 4 percent. The beta of HiLo is 1 . 3 9 . What is the risk - free rate of return?
-
Punk Corporation purchased 90 percent of Soul Companys voting common shares on January 1, 20X2, at underlying book value. At that date, the fair value of the noncontrolling interest was equal to 10...
-
Redtop Co. uses a standard cost system and flexible budgets. The following flexible budget was prepared at the 80% operating level for the year: Standard direct labor hours (DLHs) 28,800 Budgeted...
-
How can we balance cost to maximize profit in casino industry
-
A palindrome is a word that reads the same both forward and backward, like "otto", "kayak" and "racecar." An alternative, recursive definition of a palindrome is "either an empty string or a word...
-
Two infinity vertical wires run by equal and opposite currents I, are separated by a distance of 3a. In a plane perpendicular to the one formed by wires, there is a rectangular circuit with base a,...
-
Answer the following question in no more than 2 sentences See the following figure Why do you believe there has been a sharp increase in the BBSW in recent times. Provide two reasons....
-
Divide using synthetic division. 2x3+5x2-5x+7 X-3
-
Let f(n)= 32n4+ 12 n log n . Then f(n)= O (?), f(n)= Q (?), f(n)= (?) Replace question marks with the correct answer (we look for the tightest bound once possible). Choose the correct case from the...
-
Phosgene, COCl2, is a toxic gas used in the manufacture of urethane plastics. The gas dissociates at high temperature. At 400oC, the equilibrium constant Kc is 8.05 104. Find the percentage of...
-
How powerful is the ANOVA test in detecting differences between means when you are sure that there are differences? You can explore this question with simulation. Use the generic formula...
-
In the SureStep no-backlogging problem, change the demands so that they become 6000, 8000, 5000, and 3000. Also, change the problem slightly so that newly hired workers take six hours to produce a...
-
A nuclear power company is deciding whether to build a nuclear power plant at Diablo Canyon or at Roy Rogers City. The cost of building the power plant is $10 million at Diablo and $20 million at Roy...
-
State which of the following items could appear as an asset on the statement of financial position of Goblin Combe plc, a leading premium drinks business: \($150,000\) of product sold during the...
-
Trading continues apace for your new business Climb On! The products have proved to be popular and, seeing this as your opportunity to seize the day, you decided to expand and grow the business. Here...
-
A rare book library at a University of England in England houses first edition (FE), original manuscript (OM), and authors journals (AJ). Some of these rare books are worth hundreds of thousands of...
Study smarter with the SolutionInn App