Question

1. The following data for Romero Products Inc. are available:

   For the Year Ended December 31	Actual		Planned		Difference—Increase or (Decrease)
   Sales	$1,627,400		$1,468,800		$158,600
   Variable costs:
   Variable cost of goods sold	$869,000		$780,300		$88,700
   Variable selling and administrative expenses	173,800		168,300		5,500
   Total variable costs	$1,042,800		$948,600		$94,200
   Contribution margin	$584,600		$520,200		$64,400
   Number of units sold	15,800		15,300
   Per unit:
   Sales price	$103		$96
   Variable cost of goods sold	55		51
   Variable selling and administrative expenses	11		11

   Prepare an analysis of the sales quantity and unit price factors.

   Romero Products Inc.
   Contribution Margin Analysis—Sales
   For the Year Ended December 31
   Effect of changes in sales:
   Sales quantity factor	$
   Unit price factor
   Total effect of changes in sales		$

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Answer 1

solution: 1. Romero Products Inc. Contribution Margin Analysis-Sales For the Year Ended December 31 Effect of changes in sales: Sales quantity factor Unit price factor Total effect of changes in sales 48000 110600 158600 working: Sales Quantity Factor = (Actual Units Sold-Planned Units of Sales) Planned Sales Price (15800-15300)*96 48000 110600 Unit price factor = (Actual Price -Planned sale price) x Actual units sold (103-96)*15800