51 the flexible budget variance is the difference between an actual result and the f 4300563
51) The flexible-budget variance is the difference between an actual result and the flexible-budget amount based on the level of output actually achieved in the budget period.
52) Managers can gain more insight about the static-budget variance by subdividing it into the flexible-budget variance and the sales-volume variance.
53) Additional insight can be gained by dividing the sales-mix variance into the flexible-budget variance and the sales-volume variance.
54) A favorable sales-mix variance arises when the actual sales-mix percentage exceeds the budgeted sales-mix percentage.
55) A composite unit is a hypothetical unit with weights based on the mix of individual units.
56) The sales-mix variance can be explained in terms of the budgeted contribution margin per composite unit of the sales mix.
57) The sales-quantity variance is favorable when budgeted unit sales exceed actual unit sales.
58) The sales mix variance is the difference between budgeted contribution margin for the actual sales mix and the budgeted contribution margin for the budgeted sales mix.
59) The sales quantity variance is the difference between budgeted contribution margin based on actual units sold of all products at the budgeted mix, and contribution margin in the flexible budget.
60) Aromatic Coffee, Inc., sells two types of coffee, Colombian and Blue Mountain. The monthly budget for U.S. coffee sales is based on a combination of last year's performance, a forecast of industry sales, and the company's expected share of the U.S. market. The following information is provided for March:
ColombianBlue MountainColombianBlue Mountain
Sales in pounds14,000 lbs.16,000 lbs.12,800 lbs.17,200 lbs
Price per pound$12.50$15.00$12.50$15.00
Variable cost per pound5.507.006.006.50
Budgeted and actual fixed corporate-sustaining costs are $60,000 and $72,000, respectively.
a.Calculate the actual contribution margin for the month.
b.Calculate the contribution margin for the static budget.
c.Calculate the contribution margin for the flexible budget.
d.Determine the total static-budget variance, the total flexible-budget variance, and the total sales-volume variance in terms of the contribution margin.