Need help with my writing homework on Was There Increased Demand for Product B So That the Sales Price Had to or Could Be Increased. Write a 1750 word paper answering; The analysis shows the variance of the sales units for Product B. Product B was slated to sell 8500 units with total revenue being £300,000 which is a sales price of £35.29/unit. The actual amount sold was 10,500 units with total revenue being £430,000 which is a sales price £40.95/unit. The revenue would have been £370,545 if the price had remained at £35.29 but the increase in price was met with increased sales and the increased revenue was £59,455.
The variances of the variable costs of Product A are analyzed next. Product A was slated to have total variable costs of £270,000 and actually had variable costs of £280,000, which is a difference of £10,000. The number of units had increased from budgeted to 27500 to 29000 units. The budgeted variable cost per unit was $9.82. therefore even with the increase of units produced the company had a lower variable cost of $9.66 per unit and saved.
The variances of the variable costs of Product B are analyzed next. Product A was slated to have variable costs of £127,000 and actually had variable costs of £170,000, which is a difference of £43,000.
The contribution margin of Product A of the total contribution margin of both products is 62.6% while the contribution margin of Product B is 37.4%. The Variable cost percentage of Product A is 62.2% and for Product, B is 37.8%. The total contribution margin is .4% for Product A, and (.4%) for Product B.
“An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point.”
The increase in Sales was after the decrease in price for Product A from £25.09 to £24.83 and Product B’s increase in sales was actually after an increase in price for Product B from £35.29 to £40.95. . .