Sales Variances; Flexible-Budget Variance; Review of Chapter 14 Jay Banning, CEO and a major stockholder of Banning Inc., was unhappy with its operating results for the past year. The company...

Sales Variances; Flexible-Budget Variance; Review of Chapter 14 Jay Banning, CEO and a major stockholder of Banning Inc., was unhappy with its operating results for the past year. The company manufactures two environmentally friendly industrial caliber cleaning machines used primarily in automobile repair shops, gas stations, and auto dealerships. The master budget and operating results for the year (000s omitted except for the selling price per unit) follow:

Required 1. Compute the contribution margin flexible-budget variance, contribution margin sales volume variance, contribution margin sales quantity variance, and contribution margin sales mix variance for each product and for the firm. 2. Write a memo to Jay Banning about the implications of the variances that you just computed on the firm’s strategy, planning, and operational control.