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Fort Co. Produces and sell three models of family car.The basic model (the drastic), an upgraded model (the bomber) and a deluxe model ( the cracker).Allof the cars are priced to achieve a 6% mark up on standard cost.For the month of June, Fort Co. budgetd to sell 30000 units of the Drastic and so have 10 % market share of the budgetd sales at a price of $10600 each. Fort Co. actually achieved a 15 % share of the market, though the market has actually contracted by 5%.
Sales units: Drastic Bomber Crack
Budgeted 27,000 15,000 18,000
Actual 26,000 16,000 14,000
Budgeted sales price $10,600 $13,250 $16,960Q: What is the total sales mix variance for Fort Co? (to the nearest $)
I did find the amount for AQAM and SQSM, the only amount I didn’t get is AQSM. Can you help me with this, sir?
The actual total sales are 26,000 + 16,000 + 14,000 = 56,000 units.
For the mix variance, compare the actual sales of each car (26,000; 16,000; 14,000) with the actual total sales (56,000) at standard mix. They budgeted on selling 60,000 total units of which Drastic was 27,000, which is 27/60 = 45%. Therefore for the actual total sales of 56,000, at standard mix they should have sold 45% x 56,000 = 25,200. It is the same logic for the other two models.
The costings will obviously be at standard profit.
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Understood sir, thank you so much. and yes, i have watched your free lectures hehe thank youuu
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