Given below is an excerpt from a management performance report for a profit centre: $$\begin{array} { l c c c }
& \text { Budget } & \text { Actual } & \text { Difference } \
\text { Contribution margin } & \$ 600,000 & \$ 580,000 & \$ 20,000 \
\text { Controllable fixed costs } & \$ 200,000 & \$ 220,000 & \$ 20,000
\end{array}$$ How well did the manager perform overall?

Question

Given below is an excerpt from a management performance report for a profit centre: $$\begin{array} { l c c c } 
& \text { Budget } & \text { Actual } & \text { Difference } \
\text { Contribution margin } & \$ 600,000 & \$ 580,000 & \$ 20,000 \
\text { Controllable fixed costs } & \$ 200,000 & \$ 220,000 & \$ 20,000
\end{array}$$ How well did the manager perform overall?

Quizplus · Accepted Answer

The manager performed $40,000 below expectations because the contribution margin was $20,000 less than budgeted, and the controllable fixed costs were $20,000 more than budgeted, totaling a $40,000 negative variance.

Given Below Is an Excerpt from a Management Performance Report