Contribution Margin Analysis Mathews Company manufactures only one product. For the year ended December 31, the contribution margin increased by $43,790 from the planned level of $753,710. The president of Mathews Company has expressed some concern about this increase and has requested a follow-up report. The following data have been gathered from the accounting records for the year ended December 31: Difference- Increase Actual Planned (Decrease) Sales $1,537,000 $1,491,035 $45,965 Variable costs: Variable cost of goods sold $580,000 $606,245 $(26,245) Variable selling and administrative expenses 159,500 131,080 28,420 Total variable costs $739,500 $737,325 $(2,175) Contribution margin $797,500 $753,710 $43,790 Number of units sold 14,500 16,385 Per unit: Sales price $106 $91 Variable cost of goods sold 40 37 Variable selling and administrative expenses 11 81. Prepare a contribution margin analysis report for the year ended December 31. Mathews Company Contribution Margin Analysis For the Year Ended December 31 Planned contribution margin 753,710 Effect of changes in sales: Sales quantity factor $ Unit price factor Total effect of changes in sales Effect of changes in variable cost of goods sold: Variable cost quantity factor $ Unit cost factor Total effect of changes in variable cost of goods sold Effect of changes in selling and administrative expenses: Variable cost quantity factor Unit cost factor Total effect of changes in selling and administrative expenses Actual contribution margin 797,500 Feedback Check My Work 1. To obtain the actual contribution margin add: (1) the planned contribution margin; (2) the effect of changes in sales = Sales quantity factor + Unit price factor, (3) the effect of changes in variable cost of goods sold = Variable cost quantity factor + Unit cost factor; (4) the effect of changes in selling and administrative expenses = Variable cost quantity factor + Unit cost factor Learning Objective 5