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3 February, 03:24

Archoid's Flowering Plants provides the following information for the month of May: Actual Budget Tulips Geraniums Tulips Geraniums Sales in units 4,420 4,080 4,950 3,300 Contribution margin per unit $12 $19 $11 $21 What is the budgeted contribution margin per composite unit for the budgeted mix?

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  1. 3 February, 03:57
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    Contribution margin = $15

    Explanation:

    Giving the following information:

    Sales May in units:

    Budget:

    Tulips = 4,950

    Geraniums = 3,300

    Actual:

    Tulips = 4,420

    Geraniums = 4,080

    Contribution margin:

    Budget:

    Tulips = $11

    Geraniums = $21

    Actual:

    Tulips = $12

    Geraniums = $19

    We need to calculate the budgeted contribution margin per composite unit.

    First, we need to calculate the percentage of sales for each plant.

    Total units = 8250 units

    Tulips = 4950/8250 = 0.6

    Geranius = 3300/8250 = 0.4

    Contribution margin = (0.6*11) + (0.4*21) = $15
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