Motor Company is a car cleaning company. The company offers two types of services, full valet...
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Motor Company is a car cleaning company. The company offers two types of services, full valet and mini valet. Motor company charges the customers $50 for each full valet and $30 for each mini valet and this price never changes. The budget and actual figures for the last year are as follows: Budget Actual Number of Valets 3600 Full Valets Mini Valets 2000 4000 3980 Budget Actual Revenues 240,000 319,400 Variable Costs Staff Wages Cleaning Materials Energy Cost (114,000) (6,200) (6,520) (122,000) (12,400) (9,200) (126,720) (143,600) Contribution 113,280 175,800 Fixed Costs: Rent, rates and depreciation Operating profit (36,800) 76,480 (36,800) 139,000 The budgeted contribution to sales ratio for full valet are 44.6 percent and for mini valet it is S5 percent. Required: Calculate the following in S and clearly mention if it is favorable or adverse: a. The total sales mix contribution variance and the total sales quantity contribution variance. (15 MARKS) b. Briefly explain two factors that should be considered before deciding to investigate a variance. (5 MARKS) c. Briefly discuss the sales performance of the company based on your calculations in part a and other available information. (5 MARKS) Motor Company is a car cleaning company. The company offers two types of services, full valet and mini valet. Motor company charges the customers $50 for each full valet and $30 for each mini valet and this price never changes. The budget and actual figures for the last year are as follows: Budget Actual Number of Valets 3600 Full Valets Mini Valets 2000 4000 3980 Budget Actual Revenues 240,000 319,400 Variable Costs Staff Wages Cleaning Materials Energy Cost (114,000) (6,200) (6,520) (122,000) (12,400) (9,200) (126,720) (143,600) Contribution 113,280 175,800 Fixed Costs: Rent, rates and depreciation Operating profit (36,800) 76,480 (36,800) 139,000 The budgeted contribution to sales ratio for full valet are 44.6 percent and for mini valet it is S5 percent. Required: Calculate the following in S and clearly mention if it is favorable or adverse: a. The total sales mix contribution variance and the total sales quantity contribution variance. (15 MARKS) b. Briefly explain two factors that should be considered before deciding to investigate a variance. (5 MARKS) c. Briefly discuss the sales performance of the company based on your calculations in part a and other available information. (5 MARKS)
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Related Book For
Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
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