Albrecht 19.pdf - Marriott School

76154_23_ch19_p942-1006.qxd 3/1/07 3:35 PM Page 996
996 Part 6 Control in a Management Accounting System | EOC
Computer
Consulting
Construction
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600,000 $250,000
Contribution-margin percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45% 15%
Fixed costs controllable by division managers . . . . . . . . . . . . . . . . . . $200,000 $30,000
Fixed costs allocated by corporate headquarters . . . . . . . . . . . . . . . $100,000 $100,000
Required:
1. Prepare a segment margin statement for Derrald Pearl Company. Include three
columns—one for the company total and one for each of the two divisions.
2. Based on the segment margin statement prepared in part (1), what would happen to
overall company profits if the Construction Division were to be discontinued
3. Should either of the divisions be discontinued Explain.
P 19-54
LO3
Revenue Variances
Menendez Company is a merchandiser that sells three products: Salsa, Tortillas, and Queso.
The following are the actual and expected (standard) data for the three products:
Actual Data
Units Sales Price Total Actual Market
Salsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530 $5.00 2,500 units
Tortillas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760 4.00 10,000
Queso . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660 7.00 2,500
Standard Data
Units Sales Price Total Market Share
Salsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500 $6.00 25%
Tortillas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900 3.00 10
Queso . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 5.00 20
Required:
1. Compute the sales price variance and the sales volume variance for Salsa.
2. Compute the sales price variance and the sales volume variance for Tortillas.
3. Compute the sales price variance and the sales volume variance for Queso.
P 19-55
LO3
Revenue Variances
Family Friendly Photography has just finished its first year of business. It specializes in group
portraits, though the company also handles individual portraits. Revenue is determined per
photo shooting. Family Friendly Photography has divided prices into three different groups:
groups of 15 or more, groups of 2 to 15, and individuals. The following information is for its
first year of operation:
Number of
Photo Shoots
Price per
Photo Shoot
Groups of 15+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330 $280.00
Groups of 2–15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475 180.00
Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 105.00
(continued)