Question

Chow-4-Hounds (CAH) makes pet food for sale in supermarkets. CAH produces two general types: Branded and Generic. The two differ primarily in the ingredients used. At budget, Branded sells for $12 per case and has a variable cost to produce of $5 per case. Generic sells for a budgeted $9 per case and has a budgeted variable cost to produce of $4 per case. CAH expects to sell 30 percent Branded and 70 percent Generic regardless of the sales volume. C4H budgeted total sales of 200,000 cases for March. Actual case volume sold in March was 210,000 cases, of which 60,000 were Branded. Total actual revenues in March were $2,055,000, of which $780,000 were from sales of Branded cases.

Required:


a. Compute the activity variance for C4H for March. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. )


Activity variance


Compute the mix and quantity variances for March. (Do not round intermediate calculations. Indicate the effect of each varilance by selecting "for favorable,or "u" for unfavorable. If there is no effect, do not select elther option)


Mix variance


Quanlity variance

Answer 1

The question asks for calculations of the activity, mix, and quantity variances for a pet food company, comparing budgeted performance to actual sales data.

Step-by-step explanation:

This question involves calculating economic variances, specifically the activity variance, mix variance, and quantity variance, for a pet food company. To calculate these, we need to compare the budgeted figures against the actual sales performance. The activity variance is the difference between the budgeted revenue based on actual sales mix and volume and the actual revenue. The mix variance refers to how the proportion of sales between different products (Branded and Generic) affects revenue, while the quantity variance is the effect of the total volume of sales differing from the budgeted volume. In the context of the information provided, a detailed calculation would be required that takes into account the budgeted and actual sales figures for both Branded and Generic pet food types.