10.23 Analyzing contribution margin changes. The Diaz Company, which sells hard hats for construction, provided the following data for years 1 and 2:
Year 1 Year 2
Sales Volume 14,000 hats 10,000 hats
Sales Revenue 1,750,000 1,500,000
Variable Costs (1,470,000) (1,050,000)
Contribution Margin $280,000 $45,000
What impact the changes in sales volume and in sales price have on contribution margin? (Hint: Compare the actual, flexible budget portion of the profit variance analysis. Use year 1 as the " Master Budget.")© BrainMass Inc. brainmass.com June 3, 2020, 11:45 pm ad1c9bdddf
The solution explains two questions relating to master budget profit plan. The margin changes for Diaz Company is examined.