Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. shaghai tea products has an exclusive contract wit

Shaghai Tea Products has an exclusive contract with British Distributors. Calamine and Shanghai are two brands...

Free

70.2K

Verified Solution

Question

Accounting

Shaghai Tea Products has an exclusive contract with BritishDistributors. Calamine and Shanghai are two brands of teas that areimported and sold to retail outlets. The following information isprovided for the month of March: Actual Budget Calamine ShanghaiCalamine Shanghai Sales in pounds 3,400 lbs. 3,600 lbs. 4,000 lbs.3,000 lbs Price per pound $2.50 $2.50 $2.00 $3.00 Variable cost perpound 1.00 2.00 1.00 1.50 Contribution margin $1.50 $0.50 $1.00$1.50 Budgeted and actual fixed corporate-sustaining costs are$1,750 and $2,000, respectively. For the contribution margin, whatis the total flexible-budget variance? $300 favorable $1,900unfavorable $500 favorable $800 unfavorable

Answer & Explanation Solved by verified expert
3.9 Ratings (761 Votes)

Flexible budget variance = $     1,900 Unfavourable
Workings:
Actual Budget
Calamine Sanghai Calamine Sanghai
Sales in pounds (lbs)         3,400         3,600         4,000         3,000
contribution margin $       1.50 $       0.50 $       1.00 $       1.50
Actual contribution margin = (3,400 X $1.5) + (3,600 X $0.5)
= $     6,900
Contribution margin for flexible budget = (3,400 X $1) + (3,600 X $1.5)
= $     8,800
Flexible budget variance = Actual contribution margin - Contribution margin for flexible budget
= $6,900 - $8,800
= $     1,900 Unfavourable

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

In the past, fungi were thought to be plants. Explain why. Why are they no longer...

Chemistry
1.2K views

50.0 ml of 0.200 M AgNO3 is mixed with 50.0 ml of 0.050 M NaCl. Calculate...

Physics
1.2K views

In radiation safety classes, it is stressed that the amount of radiation that a person receives...

Basic Math
1.2K views

A customer service phone line claims that the wait times before a call is answered by...

Physics
1.2K views

bulb and three identical resistors form a network as shown in diagram The applied potential...

Calculus
1.2K views

Find a vector in the direction of 2 5 with length 2 Just state your...

Accounting
1.2K views

Master Budget Case: MKD...

Accounting
1.2K views

QUESIDN 5 Use the information given below to answer the following questions. Where applicable, use...

Accounting
1.2K views

Budgets have been criticised for being too time-consuming; imposing a vertical command and control structure;...

Accounting
1.2K views

Langford Beverage Company has budgeted sales of 250,000 cans of lemonade mix for the month...

Accounting
1.2K views

2. During the year Acme Corporation had net income of $20,000, shareholder dividends of $15,000...

Finance
1.2K views

How did mark-to-market (MTM) accounting factor into the credit crisis? O MBS's were undervalued O...