Answer the Following Questions Using the Information Below:
Capity Tea

question 59

Multiple Choice

Answer the following questions using the information below:
Capity Tea Products has an exclusive contract with British Distributors. Calamine and Capity are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:
$\begin{array}{lrrrr} &\text { Actual }&&\text { Budget }\\& \text { Calamine } & \text { Capity } & \text { Calamine } & \text { Capity } \\\text { Sales in pounds } & 3,740 \mathrm{lbs} . & 3,960 \mathrm{lbs} . & 4,400 \mathrm{lbs} . & 3,300 \mathrm{lbs} \\\text { Price per pound } & \$ 2.80 & \$ 2.80 & \$ 2.00 & \$ 3.00 \\\text { Variable cost per pound } & 1.00 & 2.00 & 1.00 & 1.50 \\\text { Contribution margin } & \$ 1.80 & \$ 0.80 & \$ 1.00 & \$ 1.50\end{array}$ Budgeted and actual fixed corporate-sustaining costs are $1,850 and $2,300, respectively.
-For the contribution margin,what is the total static-budget variance?

• A) $220 favorable
• B) $330 unfavorable
• C) $1,000 favorable
• D) $550 favorable

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Definitions:

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue.

Inventory Turnover

A measure that reveals the frequency at which a firm's stock is sold and replenished within a given timeframe, demonstrating the effectiveness of its inventory control.

Accounts Receivable Turnover

A financial ratio indicating how many times a company collects its average accounts receivable balance in a given period.

Year 2

Designates the second fiscal or calendar year in a sequence of years, crucial for tracking progress, budgets, and planning in various contexts.