Gasconia Company produces three models of a product. Actual results from last year are as follows: Model

Question:

Gasconia Company produces three models of a product. Actual results from last year are as follows:
Model 1 Model 2 Model 3
Unit sales..........................2,725..............1,310..............965
Selling price.........................$52...............$68..............$34
Variable expenses...................$18...............$34..............$14
Gasconia had budgeted the following amounts:
Model 1 Model 2 Model 3
Unit sales..........................2,700............1,300............1,000
Selling price........................$ 50..............$ 70..............$ 30
Variable expenses..................$ 20.............$ 30..............$ 10
Required:
1. Calculate the variance.
2. Calculate the volume variance.
3. Calculate the sales mix variance.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...