the question is below and the template to be filled is attached.. for finance cl

ID: 2421516 • Letter: T

Question

the question is below and the template to be filled is attached.. for finance class

1 PROBLEM 8-30 3 SOLUTION 5 (Revenue Variance Analysis) 7 Basic Data Actual 9 Flu Shot Volume 10 Treatment Volume 11 Total Volume 12 Flu Shot Price 13 Treatment Price 15 16 Original Budget: 17 Flex Budget 18 19 20 21 Budgeted Volumex Budgeted Mixx eted Mixx Budgeted Price Budgeted Price Actual Volumex Budgeted Mixx eted Mixx #DIV/0! #DIV/0! SO SO #DIV/0 ! #DIV/0 ! #DIV/0 ! SO SO 23 24 25 26 27 28 29 30 Flex Budget 31 VMA Budget 32 #DIV/0! #DIV/0! #DIV/0 ! #DIVO! #DIV/0! . -- Volume Variance #DIV/01 F Actual Volume Actual Volume x Budgeted Mix x Actual Mix x Budgeted Price x Budgeted Price #DIV/0! #DIV/0! SO SO #DIV/0 ! #DIV/0! #DIVO! 34 35 36 37 38 39 40 41 42 43 44 VMA Budget #DIV/0! #DIV/0! SO SO , #DIV/0! #DIVO! #DIVO! . -- Mix Variance #DIV/0! U Actual Volume x Actual Mix x Budgeted Price

Explanation / Answer

Budgeted Qty

Budgeted Price

Budgeted Sales

Actual Qty

Actual Price

Actual Sales

Flu Shots

400

20000

1200

66000

Flu Treatment

1600

128000

1400

98000

148000

164000

Sales variance is the difference between actual sales minus budgeted sales.

Sales variance = Actual Qty*Actual Price –Budgeted Qty*Budgeted Price

= 164000-148000

= 16000 F

Sales price variance is calculated as follows

(Actual Price- Budgeted Price)*Actual Qty

Flu Shots =(55-50)*1200 =6000

Flu Treatment =(70-80)*1400=- 14000

= 8000 (u)

Sales material variance is calculated as follows

(Actual Qty- Budgeted Qty)*Actual Pricw

Flu Shots =(1200-400)*50 = 40000

Flu Treatment =(1400-1600)*80=--16000

= 24000 (F)

Sales volume variance is sum of Sales Mix Variance and Sales Qty Variance.

Sales Mix Variance =(AQ-RSQ)*Sp

Flu Shots =(1200-520)*50 = 34000

Flu Treatment =(1400-1280)*80=--9600

43600(F)

Sales Qty Variance =(RSQ-Budgeted Qty)*SP

Flu Shots =(520-400)*50 = 6000

Flu Treatment =(1280-1600)*80=---25600

=19600(U)

We can see here sum is also 24000.