Question

Clayton Industries has gathered the following information about the actual sales revenues and expenses for its pharmaceuticals segment for the most recent year (all data is in millions).
Sales....................................................................................... $ 908,280
Variable Cost of Goods Sold.................................................. $ 310,590
Variable Operating Expenses................................................. $ 78,300
Direct Fixed Manufacturing Overhead.................................. $ 112,270
Direct Fixed Operating Expenses.......................................... $ 22,000
Common Fixed Expenses....................................................... $ 23,690
Budgeted data for the same time period for the pharmaceutical segment are as follows (all data is in millions):

Budgeted sales in units................................................................................ 8,700
Budgeted average selling price per unit..................................................... $ 90
Variable Cost of Goods Sold per unit.......................................................... $ 35
Variable Operating Expenses per unit......................................................... $ 10
Direct Fixed Manufacturing Overhead (in total).......................................... $ 103,000
Direct Fixed Operating Expenses (in total).................................................. $ 20,000
Common Fixed Expenses Allocated to the Pharmaceutical Segment........ $ 23,000

Prepare a segment margin performance report for the pharmaceutical segment. In this ­report, be sure to include lines for the contribution margin, the segment margin, and operating income. 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%).




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  • CreatedAugust 27, 2014
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