Susie Goodmans Products makes several lines of womens handbags. While it sells to many customers, it has
Question:
Susie Goodman’s Products makes several lines of women’s handbags. While it sells to many customers, it has recently become concerned over the performance of one specific customer, Neon Lights. Neon Lights buys two specific types of purses that come in a variety of colors. Since all that changes when the color changes is the color of the material, the company pays little attention to this detail. Instead, it focuses on whether the product is a handbag or a clutch purse. The information the company has collected on Neon Lights is in the tables below.
REQUIRED:
a. Calculate the following variances:
Total available market variance
Market share variance
Sales price variance
Manufacturing cost variance
Variable SG&A spending variance
Fixed SG&A spending variance
b. How does the Neon Lights account look? What recommendations would you make to Susie Goodman’s management?
Step by Step Answer:
Managerial Accounting An Integrative Approach
ISBN: 9780999500491
2nd Edition
Authors: C J Mcnair Connoly, Kenneth Merchant