Contribution Margin Analysis-Sales The following data for Gardot Products Inc. a

Question

Contribution Margin Analysis-Sales The following data for Gardot Products Inc. are available: Difference- Increase or Actual Planned (Decrease) For the Year Ended December 31 Sales Less $2,175,000 $2,129,100 $45,900 $27,500 9,600 $17,900 $28,000 Variable cost of goods sold $1,160,000 $1,132,500 241,600 $1,392,000 $1,374,100 $783,000 $755,000 15,100 Variable selling and administrative expenses 232,000 Total variable costs Contribution margin Number of units sold Per unit: 14,500 Sales price Variable cost of goods sold Variable selling and administrative expenses $150 80 16 $141 75 16 Prepare an analysis of the sales quantity and unit price factors. Gardot Products Inc. Contribution Margin Analysis-Sales For the Year Ended December 31 Effect of change in sales Sales quantity factor Unit price factor Total effect of change in sales

Explanation / Answer

sales quantity factor = decrease in selling units = (15,100 - 14,500) *$141 planned sale price

=>- $84,600

unit price factor =increase in sales price * number of units sold =>($150-141)*14,500

=>$130,500.

Effect of change in sales: Sales quantity factor ($84,600) unit price factor 130,500 Total effect of change in sales $45,900

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