Question Details

What is the actual contribution margin for the month 
 


1.	(Actual sales quantity in units - Static budget sales quantity in units) x Budgeted contribution margin per unit =
	a.	the sales-volume variance.
	b.	the sales-mix variance.
	c.	the sales-quantity variance.
	d.	the market-share variance.

		

2.	The sales-quantity variance results from a difference between
	a.	the actual sales mix and the budgeted sales mix.
	b.	the actual quantity of units sold and the budgeted quantity of unit sales in the static budget.
	c.	actual contribution margin and the budgeted contribution margin.
	d.	actual market size in units and the budgeted market size in units.

		

THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 3 THROUGH 6.
Ceylon Tea Products has an exclusive contract with British Distributors. Calamine and Ceylon are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:

		Actual	Budget
		Calamine	Ceylon	Calamine	Ceylon
	Sales in pounds	1,700 lbs.	1,800 lbs.	2,000 lbs.	1,500 lbs
	Price per pound	$2.50	$2.50	$2.00	$3.00
	Variable cost per pound	1.00	2.00	1.00	1.50
	Contribution margin	$1.50	$0.50	$1.00	$1.50

	Budgeted and actual fixed corporate-sustaining costs are $1,750 and $2,000, respectively.

3.	What is the actual contribution margin for the month?
	a.	$3,750
	b.	$4,400
	c.	$4,250
	d.	$3,450

	4.	What is the contribution margin for the flexible budget?
	a.	$3,750
	b.	$4,400
	c.	$4,250
	d.	$3,450

	
5.	For the contribution margin, what is the total static-budget variance?
	a.	$300 favorable
	b.	$950 unfavorable
	c.	$500 favorable
	d.	$800 unfavorable

6.	For the contribution margin, what is the total flexible-budget variance?
	a.	$300 favorable
	b.	$950 unfavorable
	c.	$500 favorable
	d.	$800 unfavorable



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