Aromatic Coffee, Inc., sells two types of coffee, Colombian and Blue Mountain. The monthly budget for U.S. coffee sales is based on a combination of last year's performance, a forecast of industry sales, and the company's expected share of the U.S. market. The following information is provided for March:
Budgeted and actual fixed corporate-sustaining costs are $60,000 and $72,000, respectively.
Required:
a. Calculate the actual contribution margin for the month.
b. Calculate the contribution margin for the static budget.
c. Calculate the contribution margin for the flexible budget.
d. Determine the total static-budget variance, the total flexible-budget variance, and the total sales-volume variance in terms of the contribution margin.
Definitions:
Double-Blind Procedure
An experimental method in which neither the participants nor the experimenters know who is receiving a particular treatment, used to eliminate bias.
Replication
The process of duplicating or reproducing something, such as a scientific study, to verify its results.
Marriage Equality
the equal recognition and legal status of marriages regardless of the gender or sexual orientation of the partners involved.
Wording Effects
The impact that the choice of words has on the meaning, interpretation, or emotional response of the recipient.
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