Mountain Maples is a mail-order nursery dedicated to growing, selling, and shipping beautiful Japanese Maple trees. Located on a ridge-top in Mendocino County, Northern California, Mountain Maples offers two distinctive types of Japanese Maples: Butterfly and Moonfire. The trees are sold after five growing seasons. Budgeted revenue and cost data for each tree type for the most recent year follow:

Mountain Maples€™ budgeted annual fixed costs are $75,000.
Actual results for the most recent year were as follows:

Required:
a. Calculate Mountain Maples€™ total profit variance for the most recent year.
b. Decompose Mountain Maples€™ total profit variance into a sales volume variance and
a flexible budget variance.
c. Decompose the flexible budget variance into a sales price variance, a variable cost variance, and fixed cost variance.
d. Compute the sales mix variance and the sales quantity variance, and show that they sum to the sales volume variance.
e. Using a budget reconciliation report, discuss the overall performance for Mountain Maples for the most recentyear.

Transcribed Image Text:

Butterjy Moonfire Quantity sold Selling price per tree Variable cost per tree 800 $200 $100 1,600 $100 $50 Butterfly Moonfire To Quantity sold Revenue Variable costs 700 1,700 $147,000 $178,500 $325,500 93,500177,500 Contribution margin $63,000 $85,000 148,000 76,000 $72,000 84,000 Fixed costs Profit