The following report and additional information have been extracted from the records of Potters Cheese and Butter (PCB).The information represents the performance around a portfolio of cheese, butter and yogurt products, all manufactured by PCB.The budgeting and planning process at PCB is simple, through minor adjustments to the previous year's results.Little in the way of new ideas seem to emerge from this process.

Budgeted Actual Volume Budgeted Flexible Volume Actual (kgs) sales $ Variance budget Variance (kgs) sales $ Sales data 5 750 000 23 000 000 22 000 000 2 750 000 5 500 000 24 750 000 Cost of goods sold 4 900 000 14 700 000 14 060 870 (1 701 630) 4 850 000 15 762 500 Contribution margin 8 300 000 (360 870) 7 939 130 1 048 370 8 987 500 Operating costs 3 000 000 3 000 000 500 000 3 500 000 Profit 5 300 000 (360 870) 4 939 130 548 370 5 487 500Additional information: Budgeted market size for cheese and butter 65 000 000 kgs Actual market size for cheese and butter 60 000 000 kgs Budgeted selling price* * $4.00 Budgeted cost of goods sold per kg $3.00 Actual selling price** $4.50 Actual cost of goods sold per kg $3.25 *#The selling price represents the average selling price of combined cheese and butter (per kg)