Expanding Operations at the Refrigerator Kingdom Corporation
The Refrigerator Kingdom Corporation is looking to expand its operations for the upcoming year after surveys on social networking sites indicated higher demand for dorm-room–ready mini-refrigerators. Members of Group D are experts on sales variances and have been asked to analyze last year’s data to determine whether the company should expand the number of mini-refrigerators that are manufactured.
The Refrigerator Kingdom Corporation’s budgeted sales of mini-refrigerators for the year are as follows:
|
Cube Fridge |
15,000 units at $90.00 per unit |
$1,350,000 |
|
Tall Fridge |
45,000 units at $120.00 per unit |
$5,400,000 |
|
Expected sales revenue |
|
$6,750,000 |
Actual sales for the year were:
|
Cube Fridge |
12,000 units at $93.00 per unit |
|
Tall Fridge |
49,500 units at $115.50 per unit |
Compute the total sales variance, the sales price variance, and the sales volume variance.
Given the analysis, consider the potential impact on HR planning for employee headcount and potential initiatives in employee development and rewards. As an HR professional, what if any concerns does the analysis raise about the ability to fund planned HR initiatives?
Prepare a report summarizing your findings and make a recommendation about the course of action that the Refrigerator Kingdom Corporation should select. Justify your recommendation through the use of your calculations
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