Question

Axel Plumbing Company has three responsibility centers: sales, production, and administration. The following information pertains to the June activities of Axel Plumbing: Budgeted contribution income $32,000 Actual contribution income 54,000 Sales price variance $48,000 F Sales volume variance 80,000 F Net sales volume variance 12,000 F Sales department variable expense variance 36,000 U Sales department fixed expense variance 2,000 U Administration department variances 0 Production department variances 0 Required: Prepare a reconciliation of budgeted and actual contribution income.

Answer 1

Budgeted contribution income $32,000

Add: sales price variance 48,000(F)   

       net sales price variance 12,000(F)

Sales department variable expenses variance     (36,000)U

Salse depatment fixed expense variance (2,000)U

Administration department variance 0

Production depatment variance 0   

Actial contibuion income                                              $54,000