# Scott Sykes publishes a pilot training course curriculum kit that he sells to flight schools across the

## Question:

Scott Sykes publishes a pilot training course curriculum kit that he sells to flight schools across the country. He prepared the following static budget for the year based on expected sales of 30,000 curriculum kits.

Sales revenue.............. $3,750,000 Variable cost of goods sold .........1,500,000 Variable selling and administrative expenses ...450,000 Contribution margin ............1,800,000 Fixed manufacturing overhead ........840,000 Fixed selling and administrative expenses .....370,000 Operating income .............$ 590,000

At the end of the year, Scott had sold 31,000 curriculum kits at an average price of $128 per kit. During the year, he incurred fixed overhead totaling$834,000.

Required

Calculate the fixed overhead spending 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...
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