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Question - Lake Cellars produces and sells white wine. The following data concern the three varietals of white wine the company currently offers. Sales data for August are given as follows.
Sauvignon Blanc
Chardonnay
Riesling
Total
Budgeted selling price
$9.00
$10.00
$7.00
Budgeted variable cost
$6.00
$7.50
$5.00
Budgeted selling quantity
20,000
8,000
12,000
40,000
Actual selling price
$9.25
$9.80
$7.10
Actual variable cost
$6.15
$7.60
$4.90
Actual selling quantity
22,000
8,500
11,500
42,000
Required -
a. Compute the sales price variance for all three wines.
b. Compute the activity variance for Lake Cellars for August.
c. Compute the mix and quantity variances for Lake Cellars for August.
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