Question

Compute the segment margin in the budget and actual columns of the table and then fill in the variance column. Explain why the segment margin was not what it was expected to be and identify the two biggest factors that caused the difference.

	Budget	Actual	Var.
Sales – A	$255,000	$224,000
Sales – B	$465,000	$436,000
Total Sales	$720,000	$660,000
Variable Costs:
Manufacturing	$105,000	$126,000
Advertising & Marketing	$75,000	$74,000
Administrative & General	$28,000	$26,000
Total Variable Costs	$208,000	$226,000
Contribution Margin	???	???
Fixed Costs:
Manufacturing	$67,000	$81,000
Advertising & Marketing	$14,000	$11,000
Administrative & General	$33,000	$30,000
Total Fixed Costs	$114,000	$122,000
Controllable Margin	???	???
Allocated Fixed Costs	$80,000	$82,000
Segment Margin	???	???

Answer 1