Question

Contribution Margin Analysis

Mathews Company manufactures only one product. For the year ended December 31, the contribution margin increased by $10,290 from the planned level of $514,710. The president of Mathews Company has expressed some concern about this increase and has requested a follow-up report.

The following data have been gathered from the accounting records for the year ended December 31:

	Actual		Planned		Difference—Increase (Decrease)
Sales	$1,008,000		$993,510		$14,490
Variable costs:
Variable cost of goods sold	$378,000		$395,010		$(17,010)
Variable selling and administrative expenses	105,000		83,790		21,210
Total variable costs	$483,000		$478,800		$(4,200)
Contribution margin	$525,000		$514,710		$10,290
Number of units sold	10,500		11,970
Per unit:
Sales price	$96		$83
Variable cost of goods sold	36		33
Variable selling and administrative expenses	10		7

Required:

1. Prepare a contribution margin analysis report for the year ended December 31.

Mathews Company
Contribution Margin Analysis
For the Year Ended December 31
Planned contribution margin		$
Effect of changes in sales:
Sales quantity factor	$
Unit price factor
Total effect of changes in sales
Effect of changes in variable cost of goods sold:
Variable cost quantity factor	$
Unit cost factor
Total effect of changes in variable cost of goods sold
Effect of changes in selling and administrative expenses:
Variable cost quantity factor	$
Unit cost factor
Total effect of changes in selling and administrative expenses
Actual contribution margin		$

Answer 1

answered by: anonymous