Clifford Industries has gathered the following information about the actual sales revenues and expenses for its pharmaceuticals segment for the most recent year. Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,327,040 Variable Cost of Goods Sold. . . . . . . . . . . . . $93,280 Variable Operating Expenses. . . . . . . . . . . . $133,760 Direct Fixed Manufacturing Overhead. . . . . $94,600 Direct Fixed Operating Expenses. . . . . . . . . $15,150 Common Fixed Expenses. . . . . . . . . . . . . . . $16,640 Budgeted data for the same time period for the pharmaceutical segment are as follows (all data are in millions): Budgeted sales in units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,800 Budgeted average selling price per unit. . . . . . . . . . . . . . . . . . . . . . $130 Variable Cost of Goods Sold per unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . $10 Variable Operating Expenses per unit. . . . . . . . . . . . . . . . . . . . . . . . $16 Direct Fixed Manufacturing Overhead (in total). . . . . . . . . . . . . . . . . . . $86,000 Direct Fixed Operating Expenses (in total). . . . . . . . . . . . . . . . . . . . . . . $15,000 Common Fixed Expenses Allocated to the Pharmaceutical Segment $16,000 Prepare a segment margin performance report for the pharmaceutical segment. Calculate a variance and a variance percentage for each line in the report. Round to the nearest hundredth for the variance percentages (for example, if your answer is 16.2384%, round it to 16.24%). Begin by preparing the performance report through the contribution margin line. Next, complete the report through the segment margin line, and then, finally, complete the report through the operating income line. (Enter the variances as positive numbers. Round the variance percentages to the nearest hundredth percent, X.XX%.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...

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Clifford Industries has gathered the following information about the actual sales revenues and expenses for its pharmaceuticals segment for the most recent year.

Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$1,327,040
Variable Cost of Goods Sold. . . . . . . . . . . . .	$93,280
Variable Operating Expenses. . . . . . . . . . . .	$133,760
Direct Fixed Manufacturing Overhead. . . . .	$94,600
Direct Fixed Operating Expenses. . . . . . . . .	$15,150
Common Fixed Expenses. . . . . . . . . . . . . . .	$16,640

Budgeted data for the same time period for the pharmaceutical segment are as follows (all data are in millions):

Budgeted sales in units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8,800
Budgeted average selling price per unit. . . . . . . . . . . . . . . . . . . . . .	$130
Variable Cost of Goods Sold per unit. . . . . . . . . . . . . . . . . . . . . . . . . . . .	$10
Variable Operating Expenses per unit. . . . . . . . . . . . . . . . . . . . . . . .	$16
Direct Fixed Manufacturing Overhead (in total). . . . . . . . . . . . . . . . . . .	$86,000
Direct Fixed Operating Expenses (in total). . . . . . . . . . . . . . . . . . . . . . .	$15,000
Common Fixed Expenses Allocated to the Pharmaceutical Segment	$16,000

Prepare a segment margin performance report for the pharmaceutical segment. Calculate a variance and a variance percentage for each line in the report. Round to the nearest hundredth for the variance percentages (for example, if your answer is 16.2384%, round it to 16.24%).

Begin by preparing the performance report through the contribution margin line. Next, complete the report through the segment margin line, and then, finally, complete the report through the operating income line. (Enter the variances as positive numbers. Round the variance percentages to the nearest hundredth percent, X.XX%.)

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