I Jay Banning, CEO and a major stockholder of Banning Incorporated, was unhappy with its operating results for the past year. Thecompany manufactures two environmentally friendly industrial caliber cleaning machines used primarily in automobile repair shops,gas stations, and auto dealerships. The master budget and operating results for the year (000s omitted except for the selling price perunit) follow:SalesVariable costContributionFixed costOperating incomeUnits soldUnit selling priceCM Flexible budget varianceCM Sales volume varianceCM Sales quantity varianceCM Sales mix varianceActualT10$ 132,00061,700$ 70,30010,000$ 60,3001,200$S40$ 58,69528,000$ 30,69510,000$ 20,6951,505T1015,300 FavorableFavorableFavorable$ (14,101) UnfavorableBudgetT10$ 105,00050,000$ 55,00010,000$ 45,000$ 100Required:1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin salesquantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round Intermediatecalculations and round your final answers to the nearest whole dollar amount.)540$ 45,00025,000$ 20,00010,000$ 10,000$ 40$40FavorableFavorableFavorableFavorableTotalFavorableFavorableFavorableUnfavorable

Every company prepares a budget for its operations every year. Budgeting is important to formulate…

Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round Intermediate calculations and round your final answers to the nearest whole dollar amount.)

Required: 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. (Do not round Intermediate calculations and round your final answers to the nearest whole dollar amount.)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 31P: Haysbert Company provides management services for apartments and rental units. In general, Haysbert...

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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 are as follows: Haysbert had budgeted the following amounts: Required: 1. Calculate the contribution margin variance. 2. Calculate the contribution margin volume variance. 3. Calculate the sales mix variance.
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