Jay Banning, CEO, and a major stockholder of Banning, Inc., was unhappy with its operating results for the past year. The company manufactures two environmentally friendly industrial cleaning machines used primarily in automobile repair shops, gas stations, and auto dealerships. The master budget and operating results of the year (000s omitted except for the selling price per unit) follow:

Required
1. Compute the contribution margin flexible budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each production and for the firm.
2. Write a memo to Jay Banning about the implications of the variances that you just computed on the firm's strategy, planning and operational control.

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Master Budget T10 S40 Tota $100,000 $40,000 $140,000 50,000 25,000 75,000 $50,000 $15,000 $65,000 10,000 10,000 20,000 $40,000 $5,000 $45,000 Actual Budget S40 Total T10 $126,000 61,200 Sales Variable costs Contribution margin $64 800 Fixed costs Operating icome$54.800 Unit selling price Units sold $58,00 $184,500 95,700 $24,000 $88,800 20,000 34,500 10,000 10,000 $100 $40