Final answer:
The question involves performing a flexible budget variance analysis and understanding budget constraints. The focus is on calculating contribution margins and interpreting budget allocation for individual expenses given specific scenarios, like the one of Alphonso deciding on the quantity of burgers and bus tickets he can afford.
Step-by-step explanation:
This question involves completing a flexible budget variance analysis for an unspecified business case related to travel locks. In a flexible budget, costs are adjusted based on the level of actual revenue or production volume. Here, the student must calculate the contribution margin for 2,000 units given certain financial data.
To compute the contribution margin, one must subtract variable costs from revenues. If we are given that the center earns revenues of $20,000 and variable costs are $15,000, then the contribution margin would be $20,000 - $15,000, which equals $5,000. This is an important figure because it indicates how much revenue is left over after covering variable costs to contribute towards fixed costs and profit.
Additionally, the student's scenario involves budget constraints and the trade-off between purchasing different items within a given budget. For instance, Alphonso's budget considerations can be expressed using the formula $2 × Qburgers + $0.50 × Qbus tickets, where Qburgers and Qbus tickets are the quantities of burgers and bus tickets respectively that Alphonso can afford.