The manager of Quality Fabricators Ltd has just reviewed the income statement for the previous quarter and is concerned by the profit earned. Her main concern is the significant difference between the planned contribution margin and the one actually achieved. The company sells only one product. A summary of contribution margins is shown below.

Required
Calculate the sales price, sales volume and variable expense variances for the quarter. Explain the variation in contribution margin to the manager.

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Sales-units Actual 64.000 Sales - dollars $435 200 Variable expenses 243 200 Contribution margin $192.000 Budget 66 000 $442 200 260 700 $181 500