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#2. Variance anallysis, sales-mix and Sales-...




#2. Variance anallysis, sales-mix and Sales-auantity variance Aussie infornautic markets three different handheld Windows CE - compatible organizer. Aussie Infonautics markets three different handheld models. PalmPro is a souped-up version for the executive on the go Palm CE is a consumer-oriented version; and PalmKid is a stripped-down version for the young adult market. You are Aussue Infonautics' senior vice president og marketing. The CEO has discovered that the total contribution margin came in lower than budgeted, and it is your responsibility to explain to him why actual resultd are different from the budget. Budgeted and actual operating data for the company's third quarter of 2010b are as follow: Selling price Variable cost per unit Contribution Margin per unit Sales Volume in Unit PalmPro $ 379 $ 182 $ 197 12,500 PalmCE 269 98 171 37,500 PalmKid 149 65 84 50,000 100,000 Actual Operating Date, Third Quarter 2010 Selling price Variable cost per unit Contribution Margin per unit Sales Volume in Unit PalmPro $ 349 $ 178 $ 171 11,000 PalmCE 285 92 193 44,000 PalmKid 102 73 29 55,000 110,000 1. Compute the actual and budgeted contribution margins in dollars for each product and total for the third quarter 2010. 2. Calculate the actual and budgeted sales-mix for the three products for the third quarter of 2010 3. Calculate total sales-volume, sales-mix, and sales quantity variances for the third quarter of 2010. (Calculate all variances in terms of contribution margin). 4. Given that the CEO is known for having temper tantrums, you want to be well prepared for this meeting in order to prepare, write a paragraph or 2 comparing actual results to budgeted amounts. Part 2 of the question Aussie infomautics senior vice president of marketing prepared his budget at the beginning of the third quarter assuning a 25% market share based on total sales. The total handheld-organizer market was estimated by Foolinstead Research to reach sales pf 400,000 units worldwide in the third quarter. However, actual sales in the third quarter were 500,000 units. 1. Calculate the market-share and market size variances for Aussie Infonautics in the 3rd quarter of 2010 (calculate all variances in terms of contribution margins.) 2. Explain what happened based on the market-share and market-size variances. 3. Calculate the actual market size, in units, that would have led to no market-size variance (again using budgeted contribution margin per unit). Use this market size figure to calculate the actual market share that would have led to a zero market-share variance.


Paper#9711 | Written in 18-Jul-2015

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