GardenKare Company manufactures several popular brands of herbicides, pesticides, fertilizers and other garden care products. The...

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GardenKare Company manufactures several popular brands of herbicides, pesticides, fertilizers and other garden care products. The company is highly decentralized and each product line is independently evaluated every month using predetermined standards. The Company's leading product, Dedbug is marketed in two different levels of potency-Zap being the most potent followed by Strike. The corporate controller, K. Roach provides you with the following data pertaining to November 2021: BUDGET Selling Product Variable Variable Sales Quantity (in tons) Production Marketing Cost per ton cost per ton per ton Price Zap $2,500 2,000 $500 $4,500 54 Strike 300 3,000 270 ACTUAL Selling Product Variable Variable Sales Quantity (in tons) Production Marketing Cost per ton cost per ton per ton Price Zap Strike $2,600 2,100 $550 $3,500 40 270 3,200 160 Management is concerned about the shortfall in profit compared to the budget and would like to know why, in order to take corrective action, if needed. Management would also like to know its impact on profit with a view to apportion responsibility to the department heads concerned. The Company based its sales estimates on a predicted monthly industry volume of 6,480 tons. In November, the sales of garden products were low and the actual industry sales were only 5,900 tons. For November, the Company did not budget any fixed costs, however, actual fixed manufacturing costs incurred were $1,800. Required: a) Compute all meaningful variances by product, wherever feasible, and reconcile budgeted income to actual income (24.5marks) b) Comment on what mainly caused the shortfall in actual income (6.5 marks). GardenKare Company manufactures several popular brands of herbicides, pesticides, fertilizers and other garden care products. The company is highly decentralized and each product line is independently evaluated every month using predetermined standards. The Company's leading product, Dedbug is marketed in two different levels of potency-Zap being the most potent followed by Strike. The corporate controller, K. Roach provides you with the following data pertaining to November 2021: BUDGET Selling Product Variable Variable Sales Quantity (in tons) Production Marketing Cost per ton cost per ton per ton Price Zap $2,500 2,000 $500 $4,500 54 Strike 300 3,000 270 ACTUAL Selling Product Variable Variable Sales Quantity (in tons) Production Marketing Cost per ton cost per ton per ton Price Zap Strike $2,600 2,100 $550 $3,500 40 270 3,200 160 Management is concerned about the shortfall in profit compared to the budget and would like to know why, in order to take corrective action, if needed. Management would also like to know its impact on profit with a view to apportion responsibility to the department heads concerned. The Company based its sales estimates on a predicted monthly industry volume of 6,480 tons. In November, the sales of garden products were low and the actual industry sales were only 5,900 tons. For November, the Company did not budget any fixed costs, however, actual fixed manufacturing costs incurred were $1,800. Required: a) Compute all meaningful variances by product, wherever feasible, and reconcile budgeted income to actual income (24.5marks) b) Comment on what mainly caused the shortfall in actual income (6.5 marks).

Answer rating: 100% (QA)

Answer a Budgeted Flexible budget Actual Budget Actual Flexible Actual Zap Strike Zap Strike Zap Str... View the full answer