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    Darwin (Solutions) Man Acct 2

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    Britania Ranque
    The document calculates contribution margin for basic and complete product units sold. It then compares the actual total contribution margin to the budgeted amount. There was a favorable variance of $10,750. When calculating the contribution margin volume variance, it equals $0, indicating it is neither favorable nor unfavorable. The sales mix variance is calculated and shows a favorable basic sales mix variance of $1,406.25 and a favorable complete sales mix variance of $2,343.75.

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    Darwin (Solutions) Man Acct 2

    Uploaded by

    Britania Ranque
    19 views2 pages
    The document calculates contribution margin for basic and complete product units sold. It then compares the actual total contribution margin to the budgeted amount. There was a favorable variance of $10,750. When calculating the contribution margin volume variance, it equals $0, indicating it is neither favorable nor unfavorable. The sales mix variance is calculated and shows a favorable basic sales mix variance of $1,406.25 and a favorable complete sales mix variance of $2,343.75.

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    Darwin (Solutions ) Man Acct 2

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    The document calculates contribution margin for basic and complete product units sold. It then compares the actual total contribution margin to the budgeted amount. There was a favorable variance of $10,750. When calculating the contribution margin volume variance, it equals $0, indicating it is neither favorable nor unfavorable. The sales mix variance is calculated and shows a favorable basic sales mix variance of $1,406.25 and a favorable complete sales mix variance of $2,343.75.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views2 pages

    Darwin (Solutions) Man Acct 2

    Uploaded by

    Britania Ranque
    The document calculates contribution margin for basic and complete product units sold. It then compares the actual total contribution margin to the budgeted amount. There was a favorable variance of $10,750. When calculating the contribution margin volume variance, it equals $0, indicating it is neither favorable nor unfavorable. The sales mix variance is calculated and shows a favorable basic sales mix variance of $1,406.25 and a favorable complete sales mix variance of $2,343.75.

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    © All Rights Reserved
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    of 2

    Darwin Company Calculation Jan 25th

    (I) Calculate contribution margin= selling price- variable expense * # of units


    Basic:
    SP = 240
    Variable expense=65
    # of units= 600
    Contribution Margin for basic= 240-65= 175 * 600= 105,000
    Complete:
    SP= 480
    V.E= 200
    # of units =400
    Contribution Margin for complete= 480-200=280 * 400=112,000
    Actual Total Contribution= (105,000+ 112,000) =217,000

    Budgeted Contribution Margin


    Basic:
    SP=220
    V.E=70
    # of units=625
    Contribution Margin for basic= 220-70=150*625=93,750
    Complete
    SP= 500
    V.E= 200
    # of units=375
    Contribution Margin for complete=500-200=300*375=112,500
    Budgeted Contribution Margin=93750+112,500=206,250
    Difference between the two=217,000-206,250=10,750
    (II) Calculate the contribution margin volume variance= (Total actual sale quantity-total
    budgeted sale quantity) x budgeted unit contribution margin (total budgeting con/
    budgeting sales quantity
    (600+400) -(625+375) x 206250/1000
    (1000-1000) x 206.25=0
    N.B When it is 0 its neither adverse nor favorable.

    (III) Calculate the sales mix variance. Rec (33.28)


    Basic sales mix= (actual sales quantity- budgeting sales quantity) x (budgeting
    contribution per unit -budgeting average unit contribution margin)
    (600-625) x (150-206.25) =1406.25 (basic is less profitable product hence
    favourable).150 less than complete sale.

    Complete sales mix= (actual sales quantity- budgeting sales quantity) x


    (budgeting contribution per unit -budgeting average unit contribution margin)
    (400- 375) x (300-206.25) =2343.75

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