Homework Answers
1.1) Calculation of actual contribution margin for the month
Olong= $2.00*3800= $7600
Jasmine= $0.70*3980= $2786
Actual contribution margin for the month= $7600+2786= $10386
So, the answer is option D) $10386
1.2) Calculation of contribution margin for flexible budget
Olong= $1.00*3800= $3800
Jasmine= $1.50*3980= $5970
Contribution margin for flexible budget= $3800+5970= $9770
So, the answer is option D) $9770
Flexible budget is calculated on the actual sales in pounds and budgeted price.
1.3) Calculation of total static budget contribution margin
Olong= $1.00*4400= $4400
Jasmine= $1.50*3300= $4950
Total static budget contribution margin= $4400+4950= $9350
Calculation of total static-budget variance
Total static budget variance for contribution margin= Actual contribution margin for the month-Total static budget contribution margin
= $10386-9350= $1036 F
So, the answer is option D) $1036 Favorable
1.4) Total flexible-budget variance= Actual contribution margin for the month-Contribution margin for flexible budget
= $10386-9770= $616 F
So, the answer is option B) $616 Favorable
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