KB & NG, Ltd. of Canada manufacture two products for the same market. Its budget and...

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KB & NG, Ltd. of Canada manufacture two products for the same market. Its budget and operating results for the year just completed follow: Actual Budget Unit of sales Product A 30,000 35,000 Product B 60,000 65,000 Contribution per unit Product A $ 4.00 $ 3.00 Product B 10.00 12.00 Selling price per unit Product A $ 10.00 $ 12.00 Product B 25.00 24.00 At the time of budget preparation, the budgeting department and sales department agreed that the industry volume for the year would likely be 1,500,000 units. Actual industry volume turned out to be 2,000,000 units. Required: 1. What is the sales mix and sales quantity contribution margin variance for each product? Verify this sales mix variance with the volume contribution margin for both products. (13 Marks) 2. What is the market size contribution margin variance? (2 Marks) 3. What is the market share contribution margin variance? (2 Marks) 4. What is the total flexible budget contribution margin variance? (4 Marks) KB & NG, Ltd. of Canada manufacture two products for the same market. Its budget and operating results for the year just completed follow: Actual Budget Unit of sales Product A 30,000 35,000 Product B 60,000 65,000 Contribution per unit Product A $ 4.00 $ 3.00 Product B 10.00 12.00 Selling price per unit Product A $ 10.00 $ 12.00 Product B 25.00 24.00 At the time of budget preparation, the budgeting department and sales department agreed that the industry volume for the year would likely be 1,500,000 units. Actual industry volume turned out to be 2,000,000 units. Required: 1. What is the sales mix and sales quantity contribution margin variance for each product? Verify this sales mix variance with the volume contribution margin for both products. (13 Marks) 2. What is the market size contribution margin variance? (2 Marks) 3. What is the market share contribution margin variance? (2 Marks) 4. What is the total flexible budget contribution margin variance? (4 Marks)

Answer rating: 100% (QA)

Answer Particulars Units of sales Product A Product B Contribution per unit Product A 400 Product B ... View the full answer