Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the...

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Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three varieties of soup based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for the most recent quarter. Budget (all units and costs in thousands) Tomato Vegetable 30 cases $1,200 $2,400 $3,600 840 Contribution margin $360 240 1,920 $ 480 240 2,760 $ 840 360 Manufacturing fixed cost Product margin $ 120 $240 $ 480 Marketing and administrative costs (all fixed) Operating profit Actual (all units and costs in thousands) Sales-units Sales-dollars Sales-units Sales-dollars Variable costs Variable costs Contribution margin Bean 30 cases Total 60 cases 120 cases $7,200 5,520 $1,680 840 $ 840 300 $ 540 24 cases 30 cases 63 cases $972 672 $300 $2,400 $3,600 1,932 2,784 $ 468 $ 816 117 cases $6,972 5,388 $1,584 Page 817 Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit 252 $48 264 378 $ 204 $ 438 894 $ 690 330 $360 Industry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was 1,140,000 cases. Required Break down the total activity variance into sales mix and quantity parts. Earle Soup Company makes three varieties of soups: Bean, Tomato, and Vegetable. Sales volume for the annual budget is determined by estimating the total market volume for soups and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three varieties of soup based on the prior year's product mix, again adjusted for planned changes for the coming year. The following are the company budget and the results of operations for the most recent quarter. Budget (all units and costs in thousands) Tomato Vegetable 30 cases $1,200 $2,400 $3,600 840 Contribution margin $360 240 1,920 $ 480 240 2,760 $ 840 360 Manufacturing fixed cost Product margin $ 120 $240 $ 480 Marketing and administrative costs (all fixed) Operating profit Actual (all units and costs in thousands) Sales-units Sales-dollars Sales-units Sales-dollars Variable costs Variable costs Contribution margin Bean 30 cases Total 60 cases 120 cases $7,200 5,520 $1,680 840 $ 840 300 $ 540 24 cases 30 cases 63 cases $972 672 $300 $2,400 $3,600 1,932 2,784 $ 468 $ 816 117 cases $6,972 5,388 $1,584 Page 817 Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit 252 $48 264 378 $ 204 $ 438 894 $ 690 330 $360 Industry volume for the quarter was estimated at 1.2 million cases for budgeting purposes. Actual industry volume for the quarter was 1,140,000 cases. Required Break down the total activity variance into sales mix and quantity parts.

Answer rating: 100% (QA)

Step 1 Sales mix variance Revised standard sales Standard sales Stand... View the full answer