The Chair Company manufactures two modular types of chairs: one for the residential market, and the other for the office market. Budgeted and actual operating data for the year 2012 are: Static Budget Residential Office Total Number of chairs sold 260,000 140,000 400,000 Contribution margin $26,000,000 $11,200,000 $37,200,000 Actual Results Residential Office Total Number of chairs sold 248,400 165,600 414,000 Contribution margin $22,356,000 $13,248,000 $35,604,000 Required: Compute the following variances in terms of contribution margin: a. Compute the total static-budget variance, the total flexible-budget variance, and the total sales-volume variance. b. Compute the sale-mix variance and the sales-quantity variance by type of chair, and in total
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The Chair Company manufactures two modular types of chairs: one for the residential market, and the other for the office market. Budgeted and actual operating data for the year 2012 are:
Static Budget Residential Office Total
Number of chairs sold 260,000 140,000 400,000
Contribution margin $26,000,000 $11,200,000 $37,200,000
Actual Results Residential Office Total
Number of chairs sold 248,400 165,600 414,000
Contribution margin $22,356,000 $13,248,000 $35,604,000
Required:
Compute the following variances in terms of contribution margin:
a. Compute the total static-
b. Compute the sale-mix variance and the sales-quantity variance by type of chair, and in total.
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