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Bloom

AAnshu8y ago
Hi John, In the following question how can you assume that the budgeted sales are 220? Maybe my English is not the best but I dont get why it is understood that budgeted sales are 220k. Bloom Limited was the subject of the following press story: Yellow sells two types of squash ball, the type A and the type B. The standard contribution from these balls is $4 and $5 respectively and the standard profit per ball is $1.50 and $2.40 respectively. The budget was to sell 5 type A balls for every 3 type B balls. Actual sales were up 20,000 at 240,000 balls with type A balls being 200,000 of that total. Yellow values its stock of balls at standard marginal cost. What is the value of the favourable sales quantity variance? Thanks!
John MoffatJohn MoffatTutor8y ago#1
Actual sales were 240,000 balls. This is 20,000 up on budget. Therefore budget sales were 240,000 - 20,000 = 220,000.
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