The Case Study Asked to Break Down a Detailed Analysis of Variances for Campar Industries, Inc

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Unit 5 Case Study 21.1 Campar Industries, Inc.

October 10, 2016

Toya Haskett

BU 610-7A

Dr. Courts

Herzing University

        The case study asked to break down a detailed analysis of variances for Campar Industries, Inc.

The Alpha Division budgeted product A’s sales volume at 24,000 units. The price per unit was $72, it’s standard cost per unit was $43. The actual sales of product A was $1,658,250 for 22,000 units. The unit margin actual is $1,658,250/22,00 - $43 = $75.38 - $43 - $32.38. The unit margin variance = $32.38 - $29.00 * 22,000 = $74,360.

The Beta Division makes 3 products in which the budgeted and actual sales and margins were given in the case study. The sales volume variance shows the difference between the budgeted and actual volume in units. Sales volume variance = 22,000 – 24,000 * $29.00 = $58,000. The gross margin variance net shows the difference between the budgeted and actual gross margin. Net gross margin variance = 22,000 * $32.38 – 24,000 * $29 = $16,360. Check my answer → $74,360 + $58,000 = $16,360.

The Gamma Division’s raw materials variance for June is the mix variance = (the standard mix * actual mix) * the standard price. For Material X the mix variance = (6,000 – 5,500) * $1.69 = $845. For Material Y the mix variance = (4,000 - $4,500) * $2.34 = $1,170. So 845 – 1,170 = $325.

The price variance for the Gamma Division = (the standard price – the actual price) * the actual volume. For Material X the price variance = (1.69-$1.69) *5,500=$0. For Material Y the price variance = ($2.34-$2.53) *4,500=$855. The usage variance = (the standard quantity-the actual quantity) *the standard price. Usage variance = (9,900-10,000) *1.95=$195. And the net variance = the mix variance + the price variance + the usage variance, which = $1,375.

Reference

Anthony. (05/2010). Accounting: Texts and Cases, 13th Edition. [VitalSource Bookshelf Online]. Retrieved from https://online.vitalsource.com/#/books/1259302172/