Question

Prepare a segment margin performance report for the pharmaceutical segment. Calculate a variance and a variance percentage for each line in the report. Round to the nearest hundredth for the variance percentages (for example, if your answer is 16.2384%, round it to 16.24%). Canon Industries has gathered the following information about the actual sales revenues and expenses for its pharmaceuticals segment for the most recent year. (Click the icon to view the actual data.) Budgeted data for the same time period for the pharmaceutical segment are as follows (all data is in millions): E (Click the icon to view the budgeted data.) Begin by preparing the performance report through the contribution margin line. Next, complete the report through the segment margin line, and then, finally, complete the report through the operating income line. (Enter the variances as positive numbers. Round the variance percentages to the nearest hundredth percent, X.XX%.) Performance Report Canon - Pharmaceutical Segment For Fiscal Year Ending December 31 Actual Variance V ariance % Sales Less Variable Expenses: Variable Cost of Goods Sold Variable Operating Expenses Contribution Margin

Answer 1

Variance = Actual Amount - Budgeted Amount

Variance % = Variance / Budgeted Amount * 100

Performance Report
Canon - Pharmaceutical segment
For the fiscal year ended December 31
Particulars	Actual	Budgeted	Variance (Actual - Budget)		Variance %	Working
Sales	$822,800.00	$748,000.00 (8800*85)	$74,800.00	F	10.00%	74800/748000
Less: Variable expenses:
Variable cost of goods sold	$237,952.00	$228,800.00 (8800*26)	$9,152.00	U	4.00%	9152/228800
Variable operating expenses	$121,440.00	$132,000.00 (8800*$15)	$10,560.00	F	8.00%	10560/132000
Contribution Margin	$463,408.00	$387,200.00	$76,208.00	F	19.68%	76208/387200
Less: Direct fixed expenses:
Fixed manufacturing overhead	$89,250.00	$85,000.00	$4,250.00	U	5.00%	4250/85000
Fixed operating expenses	$31,800.00	$30,000.00	$1,800.00	U	6.00%	= 1800/30000
Segment Margin	$342,358.00	$272,200.00	$70,158.00	F	25.77%	70158/272200
Less: Common fixed expenses allocated to the profit center	$17,510.00	$17,000.00	$510.00	U	3.00%	=510/17000
Operating Income	$324,848.00	$255,200.00	$69,648.00	F	27.29%	= 69648/255200