Variance analysis, sales-mix and sales-quantity variances. Chicago Infonautics, Inc., produces handheld Windows CE?c-compatible organizers. Chicago Infonautics markets three different handheld models: PalmPro is a souped-up version for the executive on the go, PalmCE is a consumeroriented version, and PalmKid is a stripped-down version for the young adult market. You are Chicago
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 2012 are as follows:
Budgeted Operating Data, Third Quarter 2012
Actual Operating Data, Third Quarter 2012
Required
1. Compute the actual and budgeted contribution margins in dollars for each product and in total for the third quarter of 2012.
2. Calculate the actual and budgeted sales mixes for the three products for the third quarter of 2012.
3. Calculate total sales-volume, sales-mix, and sales-quantity variances for the third quarter of 2012.
(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.