Contribution Margin Volume Variance loannis Inc., produces and sells two types of countertop ovens-the toaster oven and the convection oven. Budgeted and actual data for the two models are shown below. Budgeted Amounts: Sales: ($96 x 28,500) ($147 × 20,000) Variable expenses Contribution margin Actual Amounts: Sales: ($84 x 24,000) ($161 × 14,000) Variable expenses Contribution margin Toaster Oven $2,736,000 525,000 $2,211,000 Toaster Oven $2,016,000 530,800 $1,485,200 Convection Oven $2,940,000 770,000 $2,170,000 Convection Oven $2,254,000 685,600 $1,568,400 Total $5,676,000 1,295,000 $4,381,000 Total $4,270,000 1,216,400 $3,053,600 Required: 1. Calculate the budgeted average unit contribution margin. Round your answer to the nearest cent. Use rounded answer in subsequent computations. $fill in the blank 1 per unit 2. Calculate the contribution margin volume variance. $fill in the blank 2 FavorableUnfavorable 3. What if actual units sold of the convection oven decreased? How would that affect the contribution margin volume variance? It would become less unfavorable or more favorable.It would become more unfavorable or less favorable. What if actual units sold of the convection oven increased? How would that affect the contribution margin volume variance? It would become less unfavorable or more favorable.It would become more unfavorable or less favorable.
Contribution Margin Volume Variance loannis Inc., produces and sells two types of countertop ovens-the toaster oven and the convection oven. Budgeted and actual data for the two models are shown below. Budgeted Amounts: Sales: ($96 x 28,500) ($147 × 20,000) Variable expenses Contribution margin Actual Amounts: Sales: ($84 x 24,000) ($161 × 14,000) Variable expenses Contribution margin Toaster Oven $2,736,000 525,000 $2,211,000 Toaster Oven $2,016,000 530,800 $1,485,200 Convection Oven $2,940,000 770,000 $2,170,000 Convection Oven $2,254,000 685,600 $1,568,400 Total $5,676,000 1,295,000 $4,381,000 Total $4,270,000 1,216,400 $3,053,600 Required: 1. Calculate the budgeted average unit contribution margin. Round your answer to the nearest cent. Use rounded answer in subsequent computations. $fill in the blank 1 per unit 2. Calculate the contribution margin volume variance. $fill in the blank 2 FavorableUnfavorable 3. What if actual units sold of the convection oven decreased? How would that affect the contribution margin volume variance? It would become less unfavorable or more favorable.It would become more unfavorable or less favorable. What if actual units sold of the convection oven increased? How would that affect the contribution margin volume variance? It would become less unfavorable or more favorable.It would become more unfavorable or less favorable.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 7CE: Iliff, Inc., produces and sells two types of countertop ovensthe toaster oven and the convection...
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Transcribed Image Text:Contribution Margin Volume Variance
loannis Inc., produces and sells two types of countertop ovens-the toaster oven and the convection oven. Budgeted and actual data
for the two models are shown below.
Budgeted Amounts:
Sales:
($96 x 28,500)
($147 × 20,000)
Variable expenses
Contribution margin
Actual Amounts:
Sales:
($84 x 24,000)
($161 x 14,000)
Variable expenses
Contribution margin
Toaster
Oven
$2,736,000
525,000
$2,211,000
Toaster
Oven
$2,016,000
530,800
$1,485,200
Convection
Oven
$2,940,000
770,000
$2,170,000
Convection
Oven
$2,254,000
685,600
$1,568,400
Total
$5,676,000
1,295,000
$4,381,000
Total
$4,270,000
1,216,400
$3,053,600
Required:
1. Calculate the budgeted average unit contribution margin. Round your answer to the nearest cent. Use rounded answer in
subsequent computations.
$fill in the blank 1 per unit
2. Calculate the contribution margin volume variance.
$fill in the blank 2
FavorableUnfavorable
3. What if actual units sold of the convection oven decreased? How would that affect the contribution margin volume variance?
It would become less unfavorable or more favorable.It would become more unfavorable or less favorable.
What if actual units sold of the convection oven increased? How would that affect the contribution margin volume variance?
It would become less unfavorable or more favorable.It would become more unfavorable or less favorable.
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