Question : Use the information below to answer the following question(s). Special Tea : 1186067

 

Use the information below to answer the following question(s).

 

Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild, and 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

Strong

Mild

Actual

Strong

Mild

Price per kg

$2.00

$3.00

$2.50

$2.50

Variable cost /kg

1.00

1.50

1.00

2.00

Cont. margin   

$1.00

$1.50

$1.50

$0.50

 

 

 

 

 

Sales (in kg) 

2,000

1,500

1,700

1,800

 

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

 

21) What is the static budget variance (contribution margin) for Mild Tea?

A) $2,250 U

B) $2,250 F

C) $900 U

D) $1,350 F

E) $1,350 U

 

22) What is the STP sales-volume variance (contribution margin) for Strong tea?

A) $600 favourable

B) $600 unfavourable

C) $900 favourable

D) $900 unfavourable

E) $300 unfavourable

23) What is the STP total static-budget variance for revenues?

A) $50 favourable

B) $250 favourable

C) $50 unfavourable

D) $250 unfavourable

E) $800 unfavourable

 

24) What is the STP total flexible-budget variance for revenues?

A) $50 favourable

B) $50 unfavourable

C) $900 favourable

D) $800 favourable

E) $250 unfavourable

 

25) What is the STP total sales-volume variance (contribution margin) for May?

A) $300 favourable

B) $300 unfavourable

C) $150 favourable

D) $150 unfavourable

E) $750 unfavourable

26) What is the STP total sales-quantity variance for revenues?

A) $0

B) $150.00 unfavourable

C) $150.00 favourable

D) $300.00 unfavourable

E) $450.00 favourable

 

27) What is the STP total sales-mix variance for contribution margin?

A) $0

B) $150 unfavourable

C) $150 favourable

D) $300 favourable

E) $450 favourable

 

28) If the market-size variance is $650 F, the sales-mix variance is $500 F, the flexible budget variance is $9,250 F, and the static budget variance is $8,000 U, which of the following is true?

A) The market share variance is $18,400 U.

B) The sales volume variance is $17,250 F.

C) The sales-quantity variance is $18,400 U.

D) The sales volume variance is $17,750 U.

E) The market share variance is $17,250 U.

29) Fresh Bread Company sells a special mix of wheat bread. If the expected output equals the actual output, the sales-volume variance

A) will be negative.

B) will be positive.

C) will be favourable.

D) will be unfavourable.

E) will be zero.

 

30) The difference between (the budgeted contribution margin for the budgeted sales mix and budgeted volume) and (the budgeted contribution margin for the budgeted sales mix and the actual volume) is the

A) sales mix variance.

B) sales quantity variance.

C) sales-volume variance.

D) market size variance.

E) market share variance.