2 Based upon the following data taken from the records of Bn

2. Based upon the following data taken from the records of Bnuce Inc., prepare a contribution margin analysis report for the year ended December 31 using the template attiched on the next page. For Year Ended December 31 Increase Decrease Sales 312000 $325,000sc13,000 Less: $169,200 S182,000 12.800) Variable cost of goods sold Variable selling and administrative 32,400 39.000L6.500 S201.600 $221.000$(19.400) S110400 S104,000S 6.400 120,000 130,000(10,000) Number of units sold Per unit .10 01 S2.60 $2.50 141 1.40 30 Sales price Variable cost of goods sold Variable selling and administrative -27 (.03)

Solution

Contribution margin analysis report

Bruce inc.

for the for the year ended december 31.

Sales quantity factor

Decrease in number of units sold by 10000 - (10000*$2.5) (Note1)

Unit Price Factor

Increase in unit sales price by $0.1 -

(120000 units*$0.1) (Note 2)

Variable cost Quantity Factor

Decrease in number of units sold in actual data by 10000

(10000*$1.4)

Unit cost factor

Increase in unit Prices by 0.01

(120000*0.01) (Note 3)

Variable cost quantity factor

Decrease in number of units sold by 10000

(10000 units * $0.3)

Unit cost factor

Decrease in unit prices by $0.03

(120000 * 0.03) (Note 4)

Notes-

1) Unit sold as per actual data - $312000/$2.6 = 120000 units

Unit sold as per planned data - $325000/$2.5 = 130000 units

Difference = (130000 - 120000) = 10000 units

2) Increase in unit sales price - ($2.6 - $2.5) = $0.1

3) Increase in unit variable cost price - ($0.41 - $0.4) = $0.01

4) Decrease in unit variable selling price - ($0.3 - $0.27) = $0.03

Particulars		Amount
Planned contribution margin (A)		$104000
Effect of change in sales
Sales quantity factor Decrease in number of units sold by 10000 - (10000*$2.5) (Note1)	($25000)
Unit Price Factor Increase in unit sales price by $0.1 - (120000 units*$0.1) (Note 2)	$12000
Total effect of sales (B)		($13000)
Effect of change in variable cost of goods sold
Variable cost Quantity Factor Decrease in number of units sold in actual data by 10000 (10000*$1.4)	$14000
Unit cost factor Increase in unit Prices by 0.01 (120000*0.01) (Note 3)	($1200)
Total effect of changes in variable cost of goods sold (C)		$12800
Effect of changes in variable selling and administrative expenses
Variable cost quantity factor Decrease in number of units sold by 10000 (10000 units * $0.3)	$3000
Unit cost factor Decrease in unit prices by $0.03 (120000 * 0.03) (Note 4)	$3600
Total effect of changes in variable selling and administrative expenses (D)		$6600
Actual Contribution Margin (A + B + C + D)		$110400