a)
|
Select Audio Inc. |
|
Contribution Margin Analysis—Sales |
|
For the Year Ended December 31 |
|
Effect of changes in sales: |
|
|
|
Sales quantity factor |
$
121,875.00 |
|
|
Unit price factor |
$
-90,000.00 |
|
|
Total effect of changes in sales |
|
$
31,875.00 |
Sales quantity factor = (Actual Units Sold - Planned Units of
Sales) x Planned Sales Price
=( 36,000 - 32,250) x 32.5
=121,875
Unit price factor = (Actual Sale Price - Planned Sales Price) x
Actual Units Sold
= (30 -32.5) x 36,000
=-90,000
b)Yes the Price Decrease from 32.5 to 30 has generated enough
revenue which has covered the difference of unit price factor
