AP As the bakery manager at the local grocery store, Liam monitored the mix of products most popular with consumers. Just two years earlier, this store sold eight loaves of bread for each package of buns sold. Today, the ratio is closer to six to one, bread to buns. Liam isn't sure why tastes or buying behavior have changed, but it's significant, so his purchasing behavior has changed accordingly. For the year just ended, the bakery department budgeted for sales of 10,200 loaves of bread and 1,800 packages of buns. Actual sales were 9,680 loaves of bread and 1,320 packages of buns. Budgeted selling price and variable cost per unit for each were as follows. Bread Buns Budgeted selling price $2.00 $2.80 Budgeted variable cost 0.60 1.00 Budgeted contribution margin $1.40 $1.80 This year, the bread actually sold for $2.05 per loaf, while the package of buns sold for $2.90. Required Determine the bakery's sales price variance this year, noting the amount and sign. What is the underlying cause of this variance? Provide at least one plausible explanation for it. Determine the sales mix and sales quantity variances for the bakery this period, specifying the amount.

Answer rating: 100% (QA)

To determine the bakerys sales price variance we need to compare the actual selling price with the budgeted selling price for both bread and buns The ... View the full answer