Question 3 - Phones UK Ltd Phones UK Ltd sells two different types of mobile phones; the 'Y Phone' and the 'Z phone'. The Y phone is a budget smart phone intended to be accessible for customers with lower disposable incomes, whereas the Z phone is a premium smart phone encompassing all of the latest technological advances. The market for these type of products is very sensitive and selling prices need to be set at appropriate levels to achieve the desired sales volumes for each product whilst balancing a social need for lower price phones. The sales director is keen to see whether decisions made about selling prices have been beneficial to the company for the month of April 2020. The following budgeted figures are available for the month ended 30th April 2020: Product Budgeted sales volume in units Standard selling price Standard variable production costs per unit per unit 250 85 Y phone Z phone 80,000 325,000 500 220 The following actual figures are available for the month ended 30th April 2020: Product Actual sales Actual selling volume in units price per unit Actual variable production costs per unit 50,000 290 86 Y phone Z phone 320,000 600 250 Required: For the month ended 30th April 2020: (a) Calculate the total budgeted contribution and the total actual contribution for Phones UK Ltd. (4 marks) (b) Calculate the following variances separately for each of the two products and in total: (i) Sales price variance (4 marks) (ii) Sales volume variance (5 marks) (iii) Sales mix variance (6 marks) (iv) Sales quantity variance (6 marks) (c) Using the variances calculated in (b) above: (i) Assess the impact of the selling price decisions made in April 2020 on the company's overall results. (maximum word count 200 words) (10 marks) (ii) Critically appraise the decision made by Phones UK Ltd in April 2020 in the light of their social responsibility to provide lower price phones. (maximum word count 100 words) (5 marks) TOTAL 40 MARKS