1043 Chapter 20 Variable Costing for Management Analysis The following data have been gathered December 31: ave been gathered from the accounting records for the year ended Difference- Increase (Decrease) $1,400,000 Actual Planned $28,600,000 $30,000,000 Sales ... Variable costs: Variable cost of goods sold ........... Variable selling and administrative expenses Total variable costs ...... Contribution margin ......... Number of units sold ......... Per unit: Sales price......... Variable cost of goods sold ......... Variable selling and administrative expenses ..... $21,600,000 2,640,000 $24,240,000 $ 5,760,000 120,000 $ 21,450,000 1,950,000 $23,400,000 $ 5,200,000 130,000 $ 150,000 690,000 $ 840,000 $ 560,000 $250 180 $220 165 15 Instructions 1. Prepare a contribution margin analysis report for the year ended December 31. At a meeting of the board of directors on January 30, the president, after review ing the contribution margin analysis report, made the following comment: It looks as if the price increase of 530 had the effect of increasing sales. However, this was a trade-off since sales volume decreased. Also, variable cost of goods sold per unit increased by 515 more than planned. The variable selling and administrative expenses appear out of control. They increased by 57 per unit more than was planned, which is an in- crease of over 47% more than was planned. Let's look into these expenses and get them under controll Also, let's con sider increasing the sales price to $275 and continue this favorable trade-off between higher price and lower volume. Do you agree with the president's comment? Explain. 1. Sales quantity PR 20-6A Contribution margin analysis Farr Industries Inc. manufactures only one product. For the year ended the contribution margin increased by $560,000 from the planned level of $5,200. dent of Farr Industries Inc. has expressed concern about such a small increase margin and has requested a follow-up report ended December 31 of $5,200,000. The pres all increase in contro EXCEL TEMPLATE