The Robin’s Basket operates a chain of Italian gelato stores.

Although the Robin’s Basket

charges customers the same price for all flavors, production costs vary, depending on the type of
ingredients. Budgeted and actual operating data of its Washington, D.C., store for August 2017
are as follows:

The Robin’s Basket focuses on contribution margin in its variance analysis.

1. Compute the total sales-volume variance for August 2017.
2. Compute the total sales-mix variance for August 2017.
3. Compute the total sales-quantity variance for August 2017.
4. Comment on your results in requirements 1, 2, and 3.

(40 min.) Variance analysis, multiple products.

1, 2, and 3. Solution Exhibit 14-40 presents the sales-volume, sales-quantity, and sales-mix
variances for each flavor of gelato and in total for The Robin’s Basket in August 2017.

The sales-volume variances can also be computed as:

(Actual pints sold – Budgeted pints sold) × Budgeted contribution margin per unit

The sales-volume variances are

Mint chocolate chip = (33,750 – 35,000)  $4.20 = $ 5,250 U
Vanilla = (56,250 – 45,000)  $5.80 = 65,250 F
Rum Raisin = (22,500 – 20,000)  $4.00 = 10,000 F
All cookies $70,000 F

The sales-quantity variance can be computed as:

 Actual pints Budgeted pints  Budgeted Budgeted

 of all of all  sales mix contribution margin
 flavors sold flavors sold 
  × percentage  per unit

The sales-quantity variances are

 Mint chocolate chip = (112,500 – 100,000)  0.35  $4.20 = $18,375 F
Vanilla = (112,500 – 100,000)  0.45  $5.80 = 32,625 F
Rum Raisin = (112,500 – 100,000)  0.20  $4.00 = 10,000 F
All flavors $61,000 F

The sales-mix variances can be computed as:

 Actual Budgeted  Actual pints Budgeted
 sales-mix sales-mix  of all contribution margin
 percentage percentage 
=   × flavors sold  per unit

The sales-mix variances are:

Mint chocolate chip = (0.30 – 0.35)  112,500  $4.20 = $23,625 U
Vanilla = (0.50 – 0.45)  112,500  $5.80 = 32,625 F
Rum raisin = (0.20 – 0.20)  112,500  $4.00 = 0
All flavors $ 9,000 F