Question

The following data for Gardot Products Inc. are available:

For the Year Ended December 31	Actual		Planned		Difference—Increase or (Decrease)
Sales	$1,684,800		$1,652,400		$32,400
Less:
Variable cost of goods sold	$889,200		$874,800		$14,400
Variable selling and administrative expenses	171,600		178,200		-6,600
Total variable costs	$1,060,800		$1,053,000		$7,800
Contribution margin	$624,000		$599,400		$24,600
Number of units sold	15,600		16,200
Per unit:
Sales price	$108		$102
Variable cost of goods sold	57		54
Variable selling and administrative expenses	11		11

Prepare an analysis of the sales quantity and unit price factors.

Gardot Products Inc.
Contribution Margin Analysis—Sales
For the Year Ended December 31
Effect of change in sales:
Sales quantity factor	$
Unit price factor	$
Total effect of change in sales		$

Answer 1

Gardot Products Inc.
Statement Showing Analysis
Particulars	Description	Amount ($)
Effect of changes in sales:
Sales quantity factor	$93,600.00
Unit Price factor	-$61,200.00
Total effect of change in sales		$32,400.00

Working Note:
	Actual	Planned	Difference
Sales	$1,684,800.00	$1,652,400.00	$32,400.00
Sales Price	$108	$102	$6
Sales Qty ( Sales/Sales Price)	15,600	16,200	600

Sales Quantity Factor
Decrease in Unit ( 15600-16200)	-600
Planned Sales Price	$102
Effect due to Sales Quantity Factor (600*102)	($61,200)

Unit Price Factor
Increase in Sales Price ($108-$102)	$6
Actual Sales Quantity	$15,600
Effect due to Increase in Unit Price Factor( $6*15600)	$93,600