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John Moffat.
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- October 22, 2019 at 9:10 pm #550463
Hello sir,
I’m facing a problem in solving this question
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 the 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 it’s stock of balls at std marginal cost.
What is the Favourable sales quantity varianceI understand how the Actual sales at standard mix
But i dont understand how to get the budgeted sales at standard mixUr help will be highly appreciated
ThanksOctober 23, 2019 at 6:53 am #550482The total actual sales were 240,000 balls. This was up 20,000, so the total budget sales must have been 220,000.
The standard mix was 5A and 3 B for every 8 balls.
Therefore the budget sales of A was 5/8 x 220,000 and for B was 3/8 x 220,000
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