Question 8

Red Ltd. produces three products, A450, B650, and C850. The following budgeted and actual results were extracted from the companys records for the month of December 2017:

Budgeted Results

Product	Total Sales $	Volume/units	Price $	Contribution margin per unit $	Total contribution margin $
A450	408,000	510	800	510	260,100
B650	672,000	480	1,400	590	283,200
C850	561,000	510	1,100	480	244,800
	1,641,000	1,500			788,100

Actual Results

Product	Total Sales $	Volume/units	Price $	Contribution margin per unit $	Total contribution margin $
A450	625,000	500	1,250	560	280,000
B650	759,000	550	1,380	530	291,500
C850	720,000	600	1,200	510	306,000
	2,104,000	1,650			877,500

Required:

1. Sales margin price variance.
2. Sales margin mixture variance.
3. Sales margin volume variance.
4. Sales margin quantity variance.
5. Total sales margin variance.
6. Explain to management, giving two (3) reasons why it may be easier to have control over organizational costs than sales revenues.