Contribution Margin Analysis—Sales Blueberry, Inc., sells computer equipment. Ma
ID: 2485254 • Letter: C
Question
Contribution Margin Analysis—Sales Blueberry, Inc., sells computer equipment. Management decided early 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, 2015, the sales increased by $14,700 from the planned level of $744,800. The following information is available from the accounting records for the year ended December 31, 2015: Actual Planned Increase or (Decrease) Sales $759,500 $744,800 $14,700 Number of units sold 21,700 19,600 2,100 Sales price $35 $38 $(3) Variable cost per unit $6 $6 $0 Hide a. Prepare an analysis of the sales quantity and unit price factors. Blueberry, Inc. Contribution Margin Analysis—Sales For the Year Ended December 31, 2015 Effect of change in sales: Sales quantity factor $ Unit price factor Total effect of change in sales $ This is asking for sales quantity factor and unit price factor and total effect of change in sales....
Explanation / Answer
Answer:
Sales quantity factor = Difference in units sold * Planned unit sales price
= 2100 units* $ 38 = $79800
Unit price factor = Difference in sales price * actual units sold
= ($3) * 21700 units = ($65100)
Total effect of change in sales = Sales quantity factor + Unit price factor
= 79800 + (65100) = $14700
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