Question

Electroline Ltd manufactures and sells three products AB, CD and EF. During 2014 the budgeted and...

Electroline Ltd manufactures and sells three products AB, CD and EF. During 2014 the budgeted and actual results were presented to you the management accountant for analysis.

Budgeted Results

Product Total Sales $ Volume /Units Price$ Contribution margin per unit $ Total Contribution Margin
AB 1,500,000 1,000 1,500 700 700,000
CD 4,000,000 2,000 2,000 800 800,000
EF 1,000,000 1,000 1,000 600 600,000

Actual Results

Product Total Sales $ Volume /Units Price $

Contribution

margin per unit $

Total Contribution

Margin $

AB 1,260,000 900 1,400 600 540,000
CD 4,560,000 1,900 2,400 900 1,710,000
EF 1,484,000 1,400 1,060 720 1,008,000

Required

a) Sales margin price variance

b) Sales margin mixture variance

c)Sales margin volume variance

d)Sales margin quantity variance

e) Is it easier for management to have control over cost than revenues. Discuss

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