Question
In: Accounting
Contribution Margin Variance, Contribution Margin Volume Variance, Market Share Variance, Market Size Variance Sulert, Inc., produces...
Contribution Margin Variance, Contribution Margin Volume Variance, Market Share Variance, Market Size Variance
Sulert, Inc., produces and sells gel-filled ice packs. Sulert’s performance report for April follows:
| Actual | Budgeted | ||||
| Units sold | 290,000 | 300,000 | |||
| Sales | $1,450,000 | $1,515,000 | |||
| Variable costs | 652,500 | 636,300 | |||
| Contribution margin | $ 797,500 | $ 878,700 | |||
| Market size (in units) | 1,250,000 | 1,200,000 |
Required:
1. Calculate the contribution margin variance and the contribution margin volume variance. In your computations, round the contribution margin per unit to three decimal places.
| Contribution margin variance | $ |
| Contribution margin volume variance | $ |
2. Calculate the market share variance and the market size variance. In your computations, round the unit contribution margin to three decimal places and round the market share percentage to one decimal place (for example, .8439 would be rounded to 84.4%). Round your final answers to the nearest dollar. (CMA adapted)
| Market share variance | $ |
| Market size variance | $ |
Solutions
Expert Solution
1.
| contribution margin variance | 81,200 Unfavorable |
| contribution margin volume variance | 29,290 unfavorable |
working:
contribution margin variance = actual contribution margin - budgeted contribution margin.
(797,500-878,700)
=>-$81,200.
budgeted contribution margin per unit =$2.929.
contribution margin volume variance = (actual quantity - budgeted quantity) * budgeted average contribution margin
=> (290,000-300,000)*2.929
=>$29,290..
2.
| market share variance | $65,903 unfavorable |
| market size variance | 36,613 favorable |
working:
budgeted market share = (300,000 sales /1,200,000) =>0.25
actual market share = (290,000/1,250,000)=>0.232.
market share variance = actual market size *(actual market share -budgeted market share)* budgeted contribution margin per unit.
=>1,250,000 *(0.232-0.25) * $2.929.
=>$65,903.(rounded off).unfavorable since actual market share is lower.
market size variance = (actual market size - budgeted market size)* budgeted market share* budgeted contribution margin per unit
=>(1,250,000-1,200,000) *0.25*2.929
=>$36,613..favorable since actual market size is higher than budgeted.
ekkarill92 answered 1 year agoRelated Solutions
Contribution Margin Variance, Contribution Margin Volume Variance, Market Share Variance, Market Size Variance Sulert, Inc., produces...
Contribution Margin Variance, Contribution Margin Volume
Variance, Market Share Variance, Market Size Variance
Sulert, Inc., produces and sells gel-filled ice packs. Sulert’s
performance report for April follows:
Actual
Budgeted
Units sold
290,000
300,000
Sales
$1,450,000
$1,515,000
Variable costs
652,500
636,300
Contribution margin
$ 797,500
$ 878,700
Market size (in units)
1,250,000
1,200,000
Required:
1. Calculate the contribution margin variance
and the contribution margin volume variance. In your computations,
round the contribution margin per unit to three decimal places.
Contribution margin...
Contribution Margin Variance, Contribution Margin Volume Variance, Market Share Variance, Market Size Variance Sulert, Inc., produces...
Contribution Margin
Variance, Contribution Margin Volume Variance, Market Share
Variance, Market Size Variance
Sulert, Inc., produces
and sells gel-filled ice packs. Sulert’s performance report for
April follows:
Actual
Budgeted
Units sold
290,000
300,000
Sales
$1,450,000
$1,515,000
Variable costs
652,500
636,300
Contribution margin
$ 797,500
$ 878,700
Market size (in units)
1,250,000
1,200,000
Required:
1.
Calculate the contribution margin variance and the contribution
margin volume variance. In your computations, round the
contribution margin per unit to three decimal places.
Contribution margin...
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Oven
Convection
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Variable expenses
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Iliff, Inc., produces and sells two types of countertop
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Budgeted Amounts:
Toaster
Oven
Convection
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Total
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Variable expenses
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Convection
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Total
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Variable expenses
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XX
Variable Costs
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Variable Costs
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Contribution
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XX
Fixed Costs (Listed) XX
Fixed Costs
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XX
Operating
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XX
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Pigments
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Selling commission
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Other ingredients
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Fixed cost per unit
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