B U D G E T
Model	Selling price	Variable cost per unit		Sales Volume in units
Hydro-1	$ 650	$ 280		5,775
AiRRow	1,095	845		2,310
Magno-2	1,695	1,185		3,465
		Total		11,550

The total sales figure represents 11% of the budgeted rowing machine market in the area where RU sells its rowing equipment. Anh is fairly confident that the mix of each rowing machines sales to total is stable.

It is year end and Corey, the cost accountant, has just printed off the raw data for the year and provided Diego and Anh with the following results:

A C T U A L
Model	Selling price	Variable cost per unit		Sales Volume in units
Hydro-1	$ 665	$ 275		5,355
AiRRow	1,117	845		3,465
Magno-2	1,790	1,250		3,780
		Total			12,600

Anh is thrilled to see that her sales team has yet again beat the budget by selling a total of 12,600 rowing machines over the past 12 months. Diego has asked Corey to prepare the year-end bonuses to the sales team. He is also planning a company year end event which is an evening online dinner party (via Uber Eats) to celebrate the achievement.

Corey meets with you, the controller, to review the results and give your permission to go ahead with bonuses and the dinner party plans.

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Required

1. Calculate the sales volume variance for all three rowing machine models individually and in total (show calculations).

Hydro-1 _______________ AiRRow _______________ Magno-2 _______________ TOTAL _______________

2. Calculate the sales mix variance for all three rowing machines individually and in total.

Hydro-1 _______________ AiRRow _______________ Magno-2 _______________ TOTAL _______________

3. Calculate the sales quantity variance for all three products individually and in total. Hydro-1 _______________ AiRRow _______________ Magno-2 _______________ TOTAL _______________

When answering the following qualitative questions, remember to use figures from your analysis.

4. By now, you should have discovered that the sales volume variance is favourable. Explain how the sales mix and sales quantity variances provide further insight into the sales volume variance. (HINT: At a level of 12,600 rowing machines sold, RU should have had higher profits.)