The following data for Romero Products Inc. are available Difference- Increase o

Question

The following data for Romero Products Inc. are available Difference- Increase or (Decrease For the Year Ended December 31 Actual Planned Sales 3 Variable costs: 4 Variable cost of goods sold 200,000.00 9030,00000 $170,000.00 3,680,000.00 $3,440,000.00 Variable selling and administrative expenses 6 Total variable costs 7Contribution margin &Number; of units sold $240,000.00 17000.00 137,000.00) 000.00 $67,000.00 680,000.00 4,360,000.00 $4,257,000.00 $103 4,840,000.00 $4,773,000.00 40,000.00 43,000.00 Per unit: 10 Sales price 11Vrable cost of goods sold 2 Variable selling and administrative expenses 230.00 92.00 17.00 $210.00 80.00 19.00 Prepare a contribution margin analysis of the variable costs for Romero Products Inc. for the year ended December 31. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Explanation / Answer

Solution:

Romero Product Inc. Contribution margin analysis Particulars Details Amount Effect of changes in Sales: Unit Price factor ($230-$210)*40000 $800,000.00 Sales Quantity Factor (40000 - 43000)*$210 -$630,000.00 Total effect of changes in sales $170,000.00 Effect of changes in variable cost of goods sold: Unit cost factor ($80 - $92)*40000 -$480,000.00 Variable cost quantity factor (43000-40000)$80 $240,000.00 Total Effect of changes in variable cost of goods sold -$240,000.00 Effect of changes in variable selling and adminstrative expenses: Unit cost factor ($19 - $17)*40000 $80,000.00 Variable cost quantity factor (43000-40000)$19 $57,000.00 Total Effect of changes in variable selling and administrative expenses $137,000.00 Decrease in contribution margin from change in variable cost -$103,000.00 For the year ended Dec 31 $67,000.00

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