Hello,

Please solve 1-4.

Thank you so much!

makes and sells two types of Widgets: Widget Alpha and Widget Beta. Budgeted and actual data for the two widgets is as follows: t A Total Budgeted Amounts: Sales: $90 2,250,000 25,000 15,000 $150 2,250,000 4,500,000 Variable expenses Contribution margin 500,000 1,750,000 750,000 1,500,000 3,250,000 Actual Amounts Sales: 25,800 14,000 $88 2,270,400 $160 Variable expenses Contribution margin S 2,240,000 S 4,510,400 1,283,800 $1,728,600 S 1,498,000 S 3,226,600 541,800 742,000 Required: 1. Compute the contribution margin variance (also called the static budget variance): Budgeted CM- Actual CM. 2. Compute the contribution margin volume variance and flexible budget variance. In other words, how much of the change in profit was caused by the sales volume? How much was caused by difference in average contribution margin? Further analyze the CM volume variance in #5 by breaking it down into CM mix and quantity variances. In other words, how much of difference in profit was caused by the difference in the quantity sold, and how much was due to the difference in mix of products sold? 3. 4. INTERPRET YOUR RESULTS from (1-6) ABOVE. What additional information or analysis would we do to bring further meaning to this? and #6 independen 5. Let's assume that, in doing the above variances, you found one (or more) that you felt needed further investigation. Now what would you do? What could have caused these (Think about what goes into Contribution Margin). How might you change or adapt this model to provide the information you need? 6. Let's say you were looking at the contribution margin profit variances above. You have computed You would like to the flexible budget variance, the CM mix variance and the CM volume variance. further analyze the CM volume variance. What 2 factors could contribute to the CM volume variance? How could be isolate these to compute the effect of these factors using our general variance framework