Ellis Animal Health , inc produces a generic medication used to treat cats with feline diabetes . the liquid medication is sold in 100 ml vials . the term that Ellis uses for the product sold is a dose . Ellis employs a team of sales representatives who are varying amounts of commission . Given the narrow margins in the generic veterinary industry , Ellis relies on tight standards and cost controls to manage its operations . Ellis has the following budgeted standards for the month of april 2017 ; Budgeted sales for april 700,000 doses Average selling price per dose $ 8.30 per dose medicine ----- 105 ml / dose @ $ 0.030 / ml $ 3.15 per dose Vials ----- 1 vial per dose @ $ 0.45 / vial $ 0.45 per dose Direct manufacturing labor cost per hour $ 15.00 / hour Average labor productivity rate ( dose per hour ) 100 Sales commission is paid on all sales --- average commission $ 0.72 per dose Fixed administrative and manufacturing overhead $ 1, 100, 000 Actual results Beacause of an accident in the factory , actual results were much different than planned dose sales and production were 90% of plan . actual average selling price increased to $ 8.40 per dose productivity dropped to 90 dose per hour Raw material medicine -- the company used 72, 128, 483 milliliters of medicine . they paid $0.029 per milliliter . Vials - the company used 702, 450 vials . they paid a total of $ 365, 274 for the vials used Actual direct manufacturing labor cost was $15.10 per hpour sales commission -- the average commission was $ 0.75 per dose . fixed overhead cost were $ 40, 000 below budget . Required 1. calculate the budget using the contribution margin income statement approach showing the volume , use and rate components ( when appropriate) 2. calculate the actual results using the contribution margin income ststement approach showing the volume , use and rate components ( when appropriate) 3. prepare a report showing the complete budget variance ( i.e , variance calculated on each contribution margin income statement line ) and identify the variances as Favorable (F) or Unfavorable (U). 3b calcultate sales volume and sales rate variances ( identify as F or U ) . 4. calculate volume , usage and rate variances ( identify as F or U ) for ( a) Direct materials medicine (b) Direct materials vials (c) Direct labor (d) sales commissions . 5. Write a brief ( no longer than 2 paragraphs ) summary of the results analyzed identifying specific areas that should be focused on in upcoming months . NOTE : Excel must be used in solving the assignment.