Adapting Variance Analysis to a Marketing Department
Sue Young Sells

Essay

Adapting Variance Analysis to a Marketing Department
Sue Young sells fax machines for Express Fax. There are two fax machines: model 700 and model 800. At the beginning of the month, Sue's sales budget is as follows: $$\begin{array} { | l | r | r | } \hline & \begin{array} { r } \text { Model } \\700\end{array} & \begin{array} { r } \text { Model } \\800\end{array} \\\hline \begin{array} { l } \text { Budgeted contribution margin } \\\text { per unit }\end{array} & \$ 200 & \$ 300 \\\hline \text { Forecasted sales in units } & 100 & 100 \\\hline \text { Budgeted margins } & \$ 20,000 & \$ 30,000 \\\hline\end{array}$$ At the end of the month, the number of units sold and the actual contribution margins are as follows: $$\begin{array} { | l | r | r | } \hline & \text { Model } 700 & \text { Model } 800 \\\hline \text { Actual contribution margin } & \$ 150 & \$ 350 \\\hline \text { Number of units sold } & 150 & 80 \\\hline \text { Actual contribution } & \$ 22,500 & \$ 28,000 \\\hline\end{array}$$ Contribution margins have changed during the month because the fax machines are imported and foreign exchange rates have changed.
Required:
Design a performance evaluation report that analyzes Sue Young's performance for the month.