Gross Profit Variance Analysis Discussion Problems

B. Multi-product

Problem 1
Hogwarts Trader, Inc. sells the following products for 2022 and 2023. The following sales
and costs of sales details were obtained from the records of the company:
2023
Products Sales (in peso) Cost of sales (in peso) Units Gross Profit
Elder Wand (EW) 12,000 9,600 600 2,400
Resurrection Stone (RS) 12,800 11,200 800 1,600
Invisibility Cloak (IC) 2,400 1,800 200 600
27,200 22,600 1,600 4,600

2022
Products Sales (in peso) Cost of sales (in peso) Units Gross Profit
Elder Wand (EW) 19,200 14,400 800 4,800
Resurrection Stone (RS) 14,400 12,000 800 2,400
Invisibility Cloak (IC) 1,600 1,280 160 320
35,200 27,680 1,760 7,520
Determine the following:
1. Gross Profit Variance
2. Sales price variance
3. Sales volume variance
4. Cost price variance
5. Cost volume variance
6. Net gross profit volume variance
7. Sales mix variance
8. Final sales volume variance

Problem 2
From the records of Green Ann Co. the following were taken:
Quantity Sales Costs of Sales
Product Budget Actual Budget Actual Budget Actual
Green 45,000 45,800 450,000 458,000 270,000 274,800
Ann 30,000 26,700 180,000 186,900 108,000 96,120
Co. 5,000 9,300 25,000 55,800 15,000 27,900
80,000 81,800 655,000 700,700 393,000 398,820
Determine the sales price variance, sales volume variance, cost price variance, and cost
volume variance.