Contribution Margin and Expenses With a Single Product. Yuma Lamps has a subsidiary in Mexicali, Mexico. The subsidiary is operating under the following approved profit plan for June (in pesos):

Actual operations produced and sold 25,000 units at an average selling price of M\$20 per unit. Actual cost of goods equaled M\$12.50 per unit, and variable operating expenses were \(\mathrm{M} \$ 28,000\). Actual fixed costs were \(\mathrm{M} \$ 50,000\).
\section*{Required:}
1. Prepare an income statement that compares budget and actual results.
2. Prepare an analysis that explains the variance in contribution margin. Include the variable operating expenses as part of the variance analysis.
3. Explain why the actual product net profit is not M \(\$ 146,000\).

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Sales revenue (24,000 lamps) Variable costs: Cost of goods Variable operating expenses. Contribution margin.. M$312,000 Direct fixed costs Product net profit. M$528,000 24,000 336,000 M$192,000 46,000 M$146,000