I am having trouble figuring out what the contribution margin is under the Sales Volume Variance Section, it is highlighted in red.
Waterway Entertainment Corporation prepared a master budget for the month of November that was based on sales of 182,800 board games. The budgeted income statement for the period is as follows. Sales Revenue $ 2,742,000 Variable expenses Direct materials $ 767,760 Direct labor 383,880 Variable overhead 493,560 Total variable expenses 1,645,200 Contribution margin 1,096,800 Fixed overhead 234,000 Fixed selling and administrative expenses 444,000 Total fixed expenses 678,000 Operating income $ 418,800 During November, Waterway produced and sold 150,100 board games. Actual results for the month are as follows. Sales Revenue $ 2,147,500 Variable expenses Direct materials $ 618,620 Direct labor 302,110 Variable overhead 393,770 Total variable expenses 1,314,500 Contribution margin 833,000 Fixed overhead 221,000 Fixed selling and administrative expenses 459,000 Total fixed expenses 680,000 Operating income $ 153,000 (a) Prepare a flexible budget for November. (Round unit answers to 2 decimal places, e.g. 5.25 & all other answers to 0 decimal places, e.g. 125.) Unit 150,100 games Sales revenue $ 15 $ $ 2251500 Less : Variable expenses Direct material 4.2 i 630420 Direct labor 2.1 i 315210 Variable overhead 2.7 i 405270 PO Total variable expenses 9.00 i 1350900 Contribution margin HA 6.00 900600 Less : Fixed expenses Overhead 234000 i Selling and administrative 444000 PO i Total fixed expenses 678000 PO i Operating income $ HA 222600 (b) Calculate Waterway's static budget variance for November. (Round answers to O 125. Enter all variance amounts as positive values. If variance is zero, sele and enter o for the amounts.) Actual Results Unit Sales 150100 Sales revenue $ 2147500 Less : Variable expenses Direct material 618620 Direct labor 302110 Variable overhead 393770 Total variable expenses 1314500 Contribution margin 833000 Less 4: Fixed expenses Overhead 221000 i Selling and administrative 4 459000 Total fixed expenses 680000 Operating income $ 153000 Waterway's static budget variance for November. (Round answers to 0 decimal places, e.g. all variance amounts as positive values. If variance is zero, select "Not Applicable" for the amounts.) Static Budget Variance Static Budget 32700 i Unfavorable 182800 $ $ 594500 PE i Unfavorable $ $ 2742000 149140 i Favorable 767760 i 81770 i Favorable 383880 PO i 99790i Favorable 493560 i 330700 i Favorable 1645200 i 263800 i Unfavorable 1096800 13000 i Favorable 234000 i 15000 Unfavorable 444000 2000 i Unfavorable 678000 $ $ 265800 i Unfavorable $ $ 418800 Based on the available information, prepare a performance report for management. (If variance is zero, select "Not Applicable" and enter O for the amounts.) Actual Results Flexible Budget Variance Unit Sales 150100 0 Sales revenue 2147500 $ - 104000 Less : Variable expenses Direct material 618620 i - 11800 Direct labor 302110 i -13100 i Variable overhead 393770 i - 11500 i Total variable expenses 1314500 i -36400 i Contribution margin 833000 -67600 i Less : Fixed expenses Overhead 221000 i - 13000 i Selling and administrative 459000 i 15000 Total fixed expenses 680000 2000 Operating income $ 153000 $ -69600 ed on the available information, prepare a performance report for management. (If variance is zero, select "Not plicable" and enter O for the amounts.) Flexible Budget Sales Volume Variance Not Applicable 150100 -32700 Unfavorable Unfavorable $ 2251500 $ -490500 i Unfavorable Favorable 630420 i - 137340 i Favorable Favorable 315210 i -68670 i Favorable Favorable 405270 i -88290 i Favorable A Favorable 1350900 i -294300 i Favorable Unfavorable 900600 -196200 Unfavorable Favorable 234000 i 0 Not Applicable Unfavorable 444000 0 Not Applicable Unfavorable 678000 i 0 Not Applicable Unfavorable $ 222600 $ - 196200 i Unfavorable Static Budget 182800 $ 2742000 767760 i 383880 i 493560 i 1645200 1096800 234000 i 444000 i 678000 ta 418800
