Houston Infonautics, Inc., produces handheld Windows CE -compatible organizers. Houston Infonautics markets three different handheld models:

Houston Infonautics, Inc., produces handheld Windows CE ™ -compatible organizers. Houston Infonautics markets three different handheld models: PalmPro is a souped-up version for the executive on the go, PalmCE is a consumer-oriented version, and PalmKid is a stripped-down version for the young adult market. You are Houston Infonautics’ senior vice president of marketing. The CEO has discovered that the total contribution margin came in lower than budgeted, and it is your responsibility to explain to him why actual results are different from the budget. Budgeted and actual operating data for the company’s third quarter of 2014 are as follows:

Required
1. Compute the actual and budgeted contribution margins in dollars for each product and in total for the third quarter of 2014.
2. Calculate the actual and budgeted sales mixes for the three products for the third quarter of 2014.
3. Calculate total sales-volume, sales-mix, and sales-quantity variances for the third quarter of 2014. (Calculate all variances in terms of contribution margins.)
4. Given that your CEO is known to have temper tantrums, you want to be well prepared for this meeting. In order to prepare, write a paragraph or two comparing actual results to budgetedamounts.

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Budgeted Operating Data, Third Quarter 2014 Selling Price 5380 274 146 Variable Cost per Unit $185 97 Contribution Margin per Unit $195 Sales Volume in Units 5,550 44,400 61,050 111,000 PalmPro PalmCE PalmKid 65 81 Actual Operating Data, Third Quarter 2014 Variable Cost per Unit $180 92 Sales Volume in Units 4,600 49,450 60,950 Contribution Margin per Unit PalmPro PalmCE PalmKid Selling Price $351 284 115 192 42 73 115