Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild and these are sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea. The following information is provided for the month of May:

Budgeted fixed costs are $1,750. Actual fixed costs are $2,000.

YOU ARE REQUIRED TO DO THE FOLLOWING:-1. Prepare the original Fixed budget2. Prepare a Flexed budget3. Prepare a tabular comparative analysis using the three tables for original and flexed budget along with the Actual Results4. Identify ALL relevant variances5. Analyze the Sales Contribution margin variances and give your comments.

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Budgeled Strong Price per kg, Variable cost /kg Cont. margin Sales (in kg) $2.00 1.00 $1.00 2,000 Budgeted Mild $3.00 1.50 $1.50 1,500 Actual Strong $2.50 1.00 $1.50 1,700 Actual Mild $2.50 2.00 $0.50 1,800 Special Tes Products (STT) has an exclusive contract with Tes Distributors. Two brands of Teas are imported. Strong and Mild and these are sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tes. The following information is provided for the month of May: Budgeled Budgeled Actual Strong Mild Strong Price per kg, Variable cost /kg Cont. margin $2.00 1.00 $1.00 $3.00 1.50 $1.50 2,000 $2.50 1.00 $1.50 1,500 Actual Mild Sales (in kg) 1,700 Budgeted fixed costs are $1,750. Actual fixed costs are $2,000. YOU ARE REQUIRED TO DO THE FOLLOWING: 1. Prepare the original Fixed budget 2. Prepare a Flexed budget 3. Prepare a tabular comparative analysis using the three tables for original and flexed budget along with the Actual Results 4. Identify ALL relevant variances 5. Analyze the Sales Contribution margin variances and give your comments $2.50 2.00 $0.50 1,800 Budgeled Strong Price per kg, Variable cost /kg Cont. margin Sales (in kg) $2.00 1.00 $1.00 2,000 Budgeted Mild $3.00 1.50 $1.50 1,500 Actual Strong $2.50 1.00 $1.50 1,700 Actual Mild $2.50 2.00 $0.50 1,800 Special Tes Products (STT) has an exclusive contract with Tes Distributors. Two brands of Teas are imported. Strong and Mild and these are sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tes. The following information is provided for the month of May: Budgeled Budgeled Actual Strong Mild Strong Price per kg, Variable cost /kg Cont. margin $2.00 1.00 $1.00 $3.00 1.50 $1.50 2,000 $2.50 1.00 $1.50 1,500 Actual Mild Sales (in kg) 1,700 Budgeted fixed costs are $1,750. Actual fixed costs are $2,000. YOU ARE REQUIRED TO DO THE FOLLOWING: 1. Prepare the original Fixed budget 2. Prepare a Flexed budget 3. Prepare a tabular comparative analysis using the three tables for original and flexed budget along with the Actual Results 4. Identify ALL relevant variances 5. Analyze the Sales Contribution margin variances and give your comments $2.50 2.00 $0.50 1,800

Answer rating: 100% (QA)

Ans 1 Original Fixed Budget Budgeted strong Budgetd Mild Sales 4000 4500 20002 15003 Less Variable ... View the full answer