Exam 16: Revenue and Customer Profitability Analysis

Answer the following questions using the information below: The XTRA Appliance Manufacturing Corporation manufactures two vacuum cleaners, the Standard and the Super.The following information was gathered about the two products: -What is the total sales-quantity variance in terms of the contribution margin?

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 fixed costs are $1,750.Actual fixed costs are $2,000. -What is the STP total sales-mix variance for contribution margin?

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: Budgeted and actual fixed corporate-sustaining costs are $60,000 and $72,000, respectively.Required: a.Calculate the actual total contribution margin for the month. b.Calculate the total contribution margin for the static budget. c.Calculate the total 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.

The Omega Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences.Budgeted and actual operating data for the year are as follows: Required: a.Calculate the contribution margin for the flexible budget. b.Determine the total static-budget variance, the total flexible-budget variance, and the total sales-volume variance in terms of the contribution margin.

Each division manager for a paint manufacturer is provided with a customer profitability analysis for the past year.The managers use the analysis to determine how best to allocate the company's resources within their division, and when a customer is a "loss customer," that customer is dropped.Required: Advise (briefly)the managers on their strategy of focusing only on profitability over the year, in terms of improving the bottom line of their respective divisions.Include at least three other factors that managers should consider in deciding how to assess customer value.

Use the information below to answer the following question(s).Teddy Bear Company sold a total of 30,000 stuffed tigers and lions.During August the following information was gathered: -What is the Teddy Bear Company total sales-mix variance?

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 fixed costs are $1,750.Actual fixed costs are $2,000. -What is the STP total static-budget variance for revenues?

Answer the following question(s)using the information below: The Appliance Store sells a refrigerator and a freezer as a single package for $1,000.Other data are in the chart below. -Using the stand-alone method with selling price as the weight for revenue allocation, what amount will be allocated to the refrigerator?

Revenue tracing results in a more accurate assignment of revenues to products, than does revenue allocation.

The stand-alone revenue allocation method pertains to products that cannot be bundled together.

Use the information below to answer the following question(s).Teddy Bear Company sold a total of 30,000 stuffed tigers and lions.During August the following information was gathered: -What is the Teddy Bear Company total sales-quantity variance?

Answer the following questions using the information below: Buzz's Educational Software Outlet sells two or more of the video games as a single package.Managers are keenly interested in individual product-profitability figures.Information pertaining to three bundled products and the stand-alone prices is as follows: -Using the incremental method, what amount of revenue will be allocated to Math Fun in the package that contains all three products?

The sales-quantity variance arises because

Better Printing sells hardcover and softcover books.For January the following information is available: Required: a.Compute the market-share variance and market-size variance.(Round intermediate calculations to four decimal places) b.Compute the total sales-quantity variance .

Costs incurred to handle each unit sold would MOST likely be classified as a

Use the information below to answer the following question(s).Teddy Bear Company sold a total of 30,000 stuffed tigers and lions.During August the following information was gathered: -The (the difference between the actual market size in units and the budgeted market size in units)times (the budgeted market share)times (budgeted contribution margin per composite unit for the budgeted mix)is called the

Use the information below to answer the following question(s).John's Video Game Outlet encounters revenue-allocation decisions with its bundled product sales.Here, two or more of the video games are sold as a single package.Managers at John's are keenly interested in individual product-profitability figures.Information pertaining to its three bundled products and the stand-alone prices of its individual products is as follows: The unit manufacturing costs are $3.60, $4.00, and $5.00 for games A, B, and C, respectively. -Calculate the allocation of packaged price for Game A in Package 1, using selling prices as the base.

Answer the following question(s)using the information below: Zorro Company manufactures remote control devices for garage doors.The following information was collected during June: -What is the Zorro Company sales-quantity variance?

Which of the following statements is TRUE?

Answer the following question(s)using the information below: Elmo's Educational Software Outlet sells two or more of the video games as a single package.Managers are keenly interested in individual product profitability figures.Information pertaining to three bundled products and the stand-alone prices is as follows: Assume Reading Fun is the primary product, followed by Math Fun, and then Analysis. -Using the stand-alone method with selling price as the weight for revenue allocation, what amount of revenue will be allocated to Math Fun in the package that contains all three products?