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Hello Sir!
How the comparison between Actually quantity in budgeted mix and budgeted quantity in budgeted mix constitutes a performance measure?
Because here what i cannot understand is that AQBM is just what should have been sold in budgeted proportions and BQBM is just a budgeted figure.So when nothing is actually sold i.e AQBM how can we say that the performance of the company was good if we get a favorable total sales quantity contribution variance?
I am referring to the question called Valet Co(June 2014).The question is not directly asking for performance measures – it is asking you to discuss the sales performance of the business for the period using the information provided in the scenario.
Given that you are only given the budget sales and the actual sales, then there is no question but that actual total sales revenue is more than budgeted sales revenue and therefore the company has done better than they were expecting in terms of sales.
The answer then goes on to use the information calculated in part (a) to explain how the extra revenue was achieved – they sold more of both types of valets than was expected, the extra sales were not as high as they would have been if the mix had stayed the same because the mix has changed towards more of the cheaper valets at the expense of the more expensive valets.
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