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...
Contribution Margin Variance, Contribution Margin Volume Variance, Sales Mix Variance Kingston Company provides management services for...
Contribution Margin Variance, Contribution Margin
Volume Variance, Sales Mix Variance
Kingston Company provides management services for apartments and
rental units. In general, Kingston packages its services into two
groups: basic and complete. The basic package includes advertising
vacant units, showing potential renters through them, and
collecting monthly rent and remitting it to the owner. The complete
package adds maintenance of units and bookkeeping to the basic
package. Packages are priced on a perrental unit basis. Actual
results from last year...
Contribution Margin Variance, Contribution Margin Volume Variance, Sales Mix Variance Haysbert Company provides management services for...
Contribution Margin Variance, Contribution Margin Volume
Variance, Sales Mix Variance
Haysbert Company provides management services for apartments and
rental units. In general, Haysbert packages its services into two
groups: basic and complete. The basic package includes advertising
vacant units, showing potential renters through them, and
collecting monthly rent and remitting it to the owner. The complete
package adds maintenance of units and bookkeeping to the basic
package. Packages are priced on a per-rental unit basis. Actual
results from last year...
Contribution Margin Volume Variance Iliff, Inc., produces and sells two types of countertop ovens—the toaster oven...
Contribution Margin Volume Variance
Iliff, Inc., produces and sells two types of countertop
ovens—the toaster oven and the convection oven. Budgeted and actual
data for the two models are shown below.
Budgeted Amounts:
Toaster
Oven
Convection
Oven
Total
Sales:
($100 × 29,500)
$2,950,000
($149 × 14,500)
$2,160,500
$5,110,500
Variable expenses
460,000
800,000
1,260,000
Contribution margin
$2,490,000
$1,360,500
$3,850,500
Actual Amounts:
Toaster
Oven
Convection
Oven
Total
Sales:
($82 × 25,000)
$2,050,000
($157 × 13,500)
$2,119,500
$4,169,500
Variable expenses
570,400
658,900
1,229,300 ...
Contribution Margin Variance Iliff, Inc., produces and sells two types of countertop ovens—the toaster oven and...
Contribution Margin Variance
Iliff, Inc., produces and sells two types of countertop
ovens—the toaster oven and the convection oven. Budgeted and actual
data for the two models are shown below.
Budgeted Amounts:
Toaster
Oven
Convection
Oven
Total
Sales:
($90 × 26,500)
$2,385,000
($151 × 16,000)
$2,416,000
$4,801,000
Variable expenses
470,000
670,000
1,140,000
Contribution margin
$1,915,000
$1,746,000
$3,661,000
Actual Amounts:
Toaster
Oven
Convection
Oven
Total
Sales:
($83 × 25,500)
$2,116,500
($165 × 12,000)
$1,980,000
$4,096,500
Variable expenses
535,200
739,000
1,274,200
Contribution...
Contribution Margin Format Example: Volume &n
Contribution Margin Format Example:
Volume
XX
Sales
XX
Variable Costs
(Listed)
XX
Variable Costs
(Total)
XX
Contribution
Margin
XX
Fixed Costs (Listed) XX
Fixed Costs
(Total)
XX
Operating
Income
XX
Data for all questions:
Stuckie produces white school glue. Their glue bottles are
primarily sold at department stores across the country. The cost of
manufacturing and marketing their glue, at their normal factory
volume of 20,000,000 bottles of glue per month, is shown in the
table below. Stuckie sells...
Contribution Margin, CVP, Net Income, Margin of Safety Nail Glow, Inc., produces novelty nail polishes. Each...
Contribution Margin, CVP, Net Income, Margin of Safety
Nail Glow, Inc., produces novelty nail polishes. Each bottle
sells for $5.90. Variable unit costs are as follows:
Acrylic base $0.86
Bottle, packing material
$1.15
Pigments 0.57
Selling commission
0.14
Other ingredients 0.43
Fixed overhead costs are $34,475 per year. Fixed selling and
administrative costs are $6,720 per year. Nail Glow sold 35,000
bottles last year.
Required:
1. What is the contribution...
Contribution Margin, CVP, Net Income, Margin of Safety Nail Glow, Inc., produces novelty nail polishes. Each...
Contribution Margin, CVP, Net Income, Margin of Safety
Nail Glow, Inc., produces novelty nail polishes. Each bottle
sells for $5.90. Variable unit costs are as follows:
Acrylic base
$0.86
Bottle, packing material
$1.15
Pigments
0.57
Selling commission
0.14
Other ingredients
0.43
Fixed overhead costs are $34,475 per year. Fixed selling and
administrative costs are $6,720 per year. Nail Glow sold 35,000
bottles last year.
Required:
1. What is the contribution margin per unit for
a bottle of nail polish? Round...
PA6-1 (Algo) Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Inc., produces...
PA6-1 (Algo) Calculating Contribution Margin, Contribution
Margin Ratio, Break-Even Point [LO 6-1, 6-2]
Hermosa, Inc., produces one model of mountain bike. Partial
information for the company follows:
Number of bikes produced and sold
500
800
1,000
Total costs
Variable costs
$
118,000
$
?
$
?
Fixed costs per year
?
?
?
Total costs
?
?
?
Cost per unit
Variable cost per unit
?
?
?
Fixed cost per unit
?
?
?
Total cost per unit...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Explain how advances in technology can force a software subsystem to undergo change or run the...
- Discuss whether you agree or disagree on whether you think E-mails need to be managed and...
- b. Do any unions represent employees in Microsoft? Describe which unions are involved. c. Have there been...
- Look up and use each of these Linux commands. (Each command will have two parts) Summarize...
- What was Lincoln 10 percent plan and what problems did it present?
- A cantilever beam 4m long carries a uniform load of 3.5 kN/m over a portion 1.5m...
- Our next optimization comes from using the brilliant Rabin-Karp substring matching algorithm (RK for short), invented...
ADVERTISEMENT