Answer the Following Questions Using the Information Below

question 38

Essay

Answer the following questions using the information below:
The Sasita Corporation manufactures two types of vacuum cleaners, the Zenith for commercial building use and the House-Helper for residences.Budgeted and actual operating data for the year 2019 were as follows:
Prior to the beginning of the year, a consulting firm estimated the total volume for vacuum cleaners of the Zenith and House-Helper category to be 250,000 units, but actual industry volume was 256,000 units.
-Big Products sells only one product.Last year it sold 22,000 items when the budget was 16,000 items.The increased sales were due in part to reduced selling prices averaging $52.The budgeted selling price was $60.Total variable costs were budgeted at $144,000.Required:
Compute the contribution margin sales-volume variance.Why doesn't the contribution sales volume variance equal the difference between budgeted and actual revenue?

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Definitions:

Cost Complementarity

Occurs when the cost of producing one good decreases with the increase in production of another good, showing a synergy between the production processes of two goods.

Diseconomies Of Scope

The phenomenon where the cost of producing two or more products together is higher than producing them separately.

Economies Of Scope

cost advantages that enterprises obtain due to the efficient allocation and utilization of resources across multiple products or services.

Diseconomies Of Scope

A situation in which a company experiences increased costs as a result of increasing the variety of goods or services it produces.