Analyzing marketing variances A manufacturing company makes three different sizes of bass boats. These boats are sold to distributors who outfit them for fishing by adding outboard motors and trolling motors as well as installing depth and fish finders. The 14-foot boat sells for $2,600, the 16-foot boat for $3,800, and the 18-foot boat for $6,100. The budget for the first quarter calls for production and sales of 100 14-foot boats, 250 16-foot boats, and 150 18-foot boats for a total of 500 units. Manufacturing costs are $1,600 for the 14-foot, $2,400 for the 16-foot, and $3,800 for the 18-foot boat. Variable marketing and distribution costs are 10 percent of selling price.

During the first quarter of the year, actual production and sales were 120 14-foot boats, 220 16-foot boats, and 200 18-foot boats. Unit manufacturing costs were $1,650, $2,300, and $3,950 respectively for the three types of boats. All boats were sold at their expected prices.

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REQUIRED a. Compute the expected gross margin for the bass boats line for the first quarter of the year. b. Prepare a marketing variance analysis, based on variances from gross margin.