Multiple Choice
The Sasita Corporation manufactures two types of vacuum cleaners, the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year 20x3 were as follows:
Static Budget ZENITH House-Helper Total
Number sold 5,000 20,000 25,000
Contribution margin $1,500,000 $3,000,000 $4,500,000
Actual Results ZENITH House-Helper Total
Number sold 4,000 28,000 32,000
Contribution margin $1,280,000 $3,920,000 $5,200,000
Prior to the beginning of the year, a consulting firm estimated the total volume for vacuum cleaners of the ZENITH and House-Helper category to be 250,000 units, but actual industry volume was 256,000 units.
What is the contribution margin for the flexible budget?
a. $1,200,000
b. $4,200,000
c. $5,200,000
d. $5,400,000
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