Phicarler Company manufactures and sells one product. Its budget and actual operating results for 2020...
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Accounting
Phicarler Company manufactures and sells one product. Its budget and actual operating results for 2020 as follows:
|
| BUDGETED | ACTUAL |
| Units sold | 100,000 | 120,000 |
| Unit contribution margin | $8.00 | $10.00 |
| Unit selling price | $21.00 | $22.00 |
Industry volume was estimated to be 1,000,000 units when the budget was prepared. Actual industry volume for the period was 1,500,000 units.
Required:
- Analyze respectively the effects of market size, market share and unit contribution margin on the variance of the total contribution margin. (7%)
- Prepare a brief managerial feedback report including 4 points (8%):
- Variance of total contribution margin
- Reasons for the variance
- Responsibilities for these variances
- Initiatives for improving
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