The Chair Company manufactures two modular types of chairs: one for the residential market, and the other for the office market. Budgeted and actual operating data for the year 2015 are:
Required:
Compute the following variances in terms of contribution margin:
a.Compute the total static-budget variance, the total flexible-budget variance, and the total sales-volume variance.
b.Compute the sale-mix variance and the sales-quantity variance by type of chair, and in total.
Definitions:
Withheld FICA Tax
Taxes taken out of an employee's paycheck for Social Security and Medicare.
Excess Social Security Tax
The amount of Social Security taxes paid over the maximum limit set for the year, which can occur when an individual works for multiple employers.
Form 1040
The conventional form from the Internal Revenue Service (IRS) employed by individuals to declare their annual income taxes.
Withholding Allowances
A number that employees claim on a W-4 form that determines the amount of money withheld from their paycheck for taxes.
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