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Prepare a static budget in Excel for Vroom-Vroom based on 200,000 units produced. (36 points) Show the static budget for December in Contribution Margin Income

Prepare a static budget in Excel for Vroom-Vroom based on 200,000 units produced. (36 points)

  1. Show the static budget for December in Contribution Margin Income Statement format.
  2. Compare Decembers static budget to Decembers actual results. Specify which line items are favorable or unfavorable and how much.
  3. For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for December. Provide potential explanations for each one.
  4. Show the static budget for January in Contribution Margin Income Statement format.
  5. Compare Januarys static budget to Januarys actual results. Specify which line items are favorable or unfavorable and how much.
  6. For Ingredient Costs and Packaging Costs, break out the Price and Volume Variances for January. Provide potential explanations for each one.
Budget for 200,000 Units
Units per Month 200,000
Per Unit Total
Selling Price $59 $ 11,800,000
Variable Costs:
Raw Material $24 $4,800,000
Packaging Cost $15 $3,000,000
Electricity $4 $800,000
Waste and other costs $6 $1,200,000
Total Variable Costs $49 $9,800,000
Contribution Margin $10 $2,000,000
Fixed Costs:
Salary & Wages $350,000
Fringe Benefits $175,000
Rent Cost $750,000
Insurance Cost $50,000
Depreciation Cost $250,000
Total Fixed Costs $1,575,000
December Actual
Units 275,000
Revenue $ 16,375,000
Variable Costs:
Raw Material $ 6,450,000
Packaging Cost $ 4,150,000
Electricity $ 1,095,000
Waste and other Costs $ 1,775,000
Total Variable Costs $ 13,470,000
Contribution Margin $ 2,905,000
Fixed Costs:
Salary & Wages $ 375,000
Fringe Benefits $ 175,000
Rent Cost $ 750,000
Insurance Cost $ 50,000
Depriciation Cost $ 250,000
Total Fixed Costs $ 1,600,000
Net Income $ 1,305,000
Net Income $2.12

$425,000

January Actual
150,000
$ 8,845,000
$ 3,450,000
$ 2,250,000
$ 575,000
$ 1,025,000
$ 4,195,000
$ 4,650,000
$ 345,000
$ 175,000
$ 750,000
$ 60,000
$ 250,000
$ 1,580,000
$ 3,070,000

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