Reference no: EM132560991
Bennett limited provides mobile library services to the community of longbourn. bennett has preliminary operating results for the first year and the company found that net income is different from expected.Eizabeth , the controller has asked your assisstance in determining why this was the case.
operating results:
1. bennett based its budget on a 90% market share with a total market size of 13000 customers split 60% to regular customers and 40% to deluxe.
2. market size was actually 14200 customers
3. regular library services are budgeted at a selling price of $90 per person per quarter
4. deluxe library services are budgeted at a selling price of $120 per person per quarter
5. Actual selling prices for the quarter were $92 and $125 for the regular and deluxe services
Actual budgeted
Sales
regular $690000 $631800
deluxe $587500 $561600
Expenses
Variable:
Program costs,regular $174180 $168480
Program costs , deluxe $203220 $196560
Fixed:
Delivery services $103936 $102750
Amortisation books and vans $122000 $122000
Administration $80000 $80000
Marketing $90000 $90000
Required:
Question 1: Calculate the sales variances for Bennett and state for Elizabeth what each variance indicates.