Chapter 10, Problem 10.19AE

Prepare a segment margin performance report (Learning Objective 2)

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

Sales	$ 866,320
Variable Cost of Goods Sold	$ 143,325
Variable Operating Expenses	$ 162,162
Direct Fixed Manufacturing Overhead	$ 96,300
Direct Fixed Operating Expenses	$17,280
Common Fixed Expenses	$ 14,140

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

Budgeted sales in units	9,100
Budgeted average selling price per unit	$ 85
Variable Cost of Goods Sold per unit	$ 15
Variable Operating Expenses per unit	$ 18
Direct Fixed Manufacturing Overhead (in total)	$ 90,000
Direct Fixed Operating Expenses (in total)	$ 16,000
Common Fixed Expenses Allocated to the Pharmaceutical Segment	$ 14,000

Prepare a segment margin performance report for the pharmaceutical segment. In this report, be sure to include lines for the contribution margin, the segment margin, and operating income. 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%).