Contribution Margin Variance

Iliff, Inc., produces and sells two types of countertop ovensthe toaster oven and the convection oven. Budgeted and actual data for the two models are shown below.

Budgeted Amounts:

		Toaster Oven		Convection Oven		Total
Sales:
($96 29,500)		$2,832,000
($153 17,000)				$2,601,000		$5,433,000
Variable expenses		540,000		660,000		1,200,000
Contribution margin		$2,292,000		$1,941,000		$4,233,000

Actual Amounts:

		Toaster Oven		Convection Oven		Total
Sales:
($82 26,000)		$2,132,000
($159 14,000)				$2,226,000		$4,358,000
Variable expenses		561,600		676,700		1,238,300
Contribution margin		$1,570,400		$1,549,300		$3,119,700

Required:

1. Calculate the contribution margin variance.

$________ Unfavorable

2. What if actual units sold of the convection oven decreased? How would that affect the contribution margin variance?

What if actual units sold of the convection oven increased? How would that affect the contribution margin variance?