Bay Area Sound, Inc. sells computer speakers. 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, 2011, the sales increased by $19,000 from the planned level of $989,000. The following information is available from the accounting records for the year ended December 31, 2011:

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 $7, asplanned?

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Increase or (Decrease) $19,000 Actual Planned Sales Number of units sold Sales price Variable cost per unit $1,008,000 24,000 $4200 $7.00 $989,000 21,500 $46.00 $7.00 2500 $14.00)