Compute the sales-mix variance

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Reference no: EM132883331

Question - Show all of your work including computations.

A company manufactures two modular types of chairs: one for the residential market, and the other for the office market. Budgeted and actual operating data for the year 2020 are:

Static Budget

Residential

Office

Total

Number of chairs sold

520,000

280,000

800,000

Contribution margin

$52,000,000

$22,400,000

$74,400,000

Contribution margin/unit

$100

$80

 

 

Actual Results

Residential

Office

Total

Number of chairs sold

496,800

331,200

828,000

Contribution margin

$44,712,000

$26,496,000

$71,208,000

Contribution margin/unit

$90

$80

 

Required - Compute the following variances in terms of contribution margin:

a. Compute the sales-mix variance and the sales-quantity variance by type of chair, and it total for both types of chairs combined.

b. Compute the total sales-volume variance.

Reference no: EM132883331

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