Variance analysis, sales-mix and sales-quantity variances. Aussie Infonautics, Inc., produces handheld Windows-compatible organizers. Aussie Infonautics markets three different handheld models. PalmPro is a souped-up version for the executive on the go;

PalmCE is a consumer-oriented version; PalmKid is a stripped down version for the young adult market. You are Aussie Infonautics, senior vice-president of marketing. The CEO has discovered that the total contribution margin came in lower than budget, and it is your responsibility to explain to him why actual results are different from the budget.

Budgeted and actual operating data for Aussie Infonautics’ Inc.’s third quarter (2007) are as follows:

Budgeted Operating Data, Third Quarter 2007 Selling Price Variable Costs per Unit Contribution Margin per Unit Sales Volume in Units PalmPro $384 $182 $202 12,500 PalmCE 274 98 176 37,500 PalmKid 154 65 89 50,000 100,000 Actual Operating Data, Third Quarter 2007 Selling Price Variable Costs per Unit Contribution Margin per Unit Sales Volume in Units PalmPro $354 $178 $176 11,000 PalmCE 290 92 198 44,000 PalmKid 107 73 34 55,000 660 CHAPTER 16 110,000 Required 1. Compute the actual and budgeted contribution margins in dollars and in percentage terms.
2. Calculate the actual and budgeted sales mix for the three products.
3. Calculate the individual product flexible-budget, sales-volume, sales-mix, and salesquantity variances for the third quarter of 2007.
4. Calculate total sales-volume, sales-mix, and sales-quantity variances for the third quarter of 2007.
5.Given that your CEO is known to have temper tantrums, you want to be well prepared for this meeting. To prepare, write a paragraph or two explaining why actual results were not as good as the budgeted amounts.
/16-29 jMarket-share and market-size variances (continuation of 16-28). Aussie Infonautics, ( /Inc.’s senior vice-president of marketing prepared his budget at the beginning of the third V—/ quarter assuming a 2 5% market share. The total handheld organizer market was estimated by Foolinstead Research to reach sales of 400,000 units worldwide in the third quarter.
However, actual sales were 500,000 units.
Required 1. Calculate the market-share and market-size variances for Aussie Infonautics in the third quarter of 2007 (report 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 average contribution margin per unit). Use this market-size figure to find the actual market share that would have led to a zero market-share variance.