14-36 Variance analysis, sales-mix and sales-quantity variances. Houston Infonautics, Inc., produces handheld Windows CETM-compatible organizers. Houston Infonautics markets three different handheld models: PalmPro is a souped-up version for the executive on the go, PalmCE is a consumer-oriented version, and Palmkid is a stripped-down version for the young adult market. You are Houston Infonautics' senior vice president of marketing. The CEO has discovered that the total contribution margin came in lower than budgeted, and it is your responsibility to explain to him why actual results are different from the budget. Budgeted and actual operating data for the company's third quarter of 2014 are as follows: Budgeted Operating Data, Third Quarter 2014 Variable Cost Contribution Sales Volume Selling Price per Unit Margin per Unit in Units PalmPro $380 $185 $195 5,550 PalmCE 274 97 177 44,400 PalmKid 146 65 81 61,050 1 11,000 Actual Operating Data, Third Quarter 2014 Variable Cost Contribution Sales Volume Selling Price per Unit Margin per Unit in Units PalmPro $351 $180 $ 171 4,600 PalmCE 284 92 192 49,450 PalmKid 115 73 42 60,950 115,000 1. Compute the actual and budgeted contribution margins in dollars for each product and in total for the third quarter of 2014 2. Calculate the actual and budgeted sales mixes for the three products for the third quarter of 2014. 3. Calculate total sales-volume, sales-mix, and sales-quantity variances for the third quarter of 2014. (Calculate all variances in terms of contribution margins.) 4. Given that your CEO is known to have temper tantrums, you want to be well prepared for this meeting. In order to prepare, write a paragraph or two comparing actual results to budgeted amounts