menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Contribution margin analysis — sales Select Audio Inc. sells electronic equipment. Management decided curly in the year to reduce the price of the speakers in order to increase sales volume. As a result, for the year ended December 31, the .sales increased by $31,875 from the planned level of $1,048,125. The following information is available from the accounting records for the year ended December 31. A. Prepare an analysis of the sales quantity and unit price factors. B. Did the price decrease generate sufficient volume to result in a net increase in contribution margin if the actual variable cost per unit was $10, as planned?

BuyFindarrow_forward

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207

Solutions

Chapter
Section
BuyFindarrow_forward

Financial & Managerial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337119207
Chapter 20, Problem 20.17EX
Textbook Problem
5 views

Contribution margin analysis — sales

Select Audio Inc. sells electronic equipment. Management decided curly in the year to reduce the price of the speakers in order to increase sales volume. As a result, for the year ended December 31, the .sales increased by $31,875 from the planned level of $1,048,125. The following information is available from the accounting records for the year ended December 31.

Chapter 20, Problem 20.17EX, Contribution margin analysis  sales Select Audio Inc. sells electronic equipment. Management decided

  1. A. Prepare an analysis of the sales quantity and unit price factors.
  2. B. Did the price decrease generate sufficient volume to result in a net increase in contribution margin if the actual variable cost per unit was $10, as planned?

(a)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The analysis of the sales quantity and unit price factor of Incorporation SA.

Explanation of Solution

Sales quantity factor is calculated by deducting planned units from actual units and then multiplies with planned sales price per unit...

(b)

To determine

To Identify: The price decrease, it generates sufficient volume to result in a net increase in contribution margin, if the actual variable cost per unit was $10, as planned.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 20 Solutions

Financial & Managerial Accounting
Show all chapter solutions
add
Ch. 20 - Explain why service companies use different...Ch. 20 - Variable costing Marley Company has the following...Ch. 20 - Variable costingproduction exceeds sales Fixed...Ch. 20 - Variable costing sales exceed production The...Ch. 20 - Analyzing income under absorption and variable...Ch. 20 - Contribution margin by segment The following...Ch. 20 - Contribution margin analysis The actual variable...Ch. 20 - Inventory valuation under absorption costing and...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Cost of goods manufactured, using variable costing...Ch. 20 - Variable costing income statement On November 30,...Ch. 20 - Absorption costing income statement On March 31....Ch. 20 - Variable costing income statement The following...Ch. 20 - Estimated income statements, using absorption and...Ch. 20 - Variable and absorption costing Ansara Company had...Ch. 20 - How is the quantity factor for an incrca.sc or a...Ch. 20 - Explain why service companies use different...Ch. 20 - Product profitability analysis Power Train Sports...Ch. 20 - Territory and product profitability analysis Coast...Ch. 20 - Sales territory and salesperson profitability...Ch. 20 - Segment profitability analysis The marketing...Ch. 20 - Segment contribution margin analysis The operating...Ch. 20 - Contribution margin analysis sales Select Audio...Ch. 20 - Contribution margin analysis sales The following...Ch. 20 - Contribution margin analysis variable costs Based...Ch. 20 - Variable costing income statement for a service...Ch. 20 - Contribution margin reporting and analysis for a...Ch. 20 - Variable costing income statement and contribution...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Salespersons' report and analysis Walthman...Ch. 20 - Segment variable costing income statement and...Ch. 20 - Contribution margin analysis Farr Industries Inc....Ch. 20 - B Absorption and variable costing income...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Salespersons' report and analysis Pachec Inc....Ch. 20 - Variable costing income statement and effect on...Ch. 20 - Contribution margin analysis Mathews Company...Ch. 20 - Yum! Brands: Segment sales and EBITDA analysis...Ch. 20 - Walt Disney: Segment revenue analysis The Walt...Ch. 20 - Apple Inc.: Segment revenue analysis Segment...Ch. 20 - LVMH: Group segment sales and EBITDA analysis LVMH...Ch. 20 - Ethics in Action The Southern Division manager of...Ch. 20 - Communication Bon Jager Inc. manufactures and...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What does the invisible hand of the marketplace do?

Principles of Microeconomics (MindTap Course List)

What are the major elements of Herzbergs motivationhygiene theory?

Foundations of Business (MindTap Course List)

YIELD CURVES Yields on U.S. Treasury securities were as follows: Term Rate 6 months 5.1% 1 year 5.5 2 years 5.6...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Briefly describe five limitations of financial statement analysis.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)