Ar-Cee Hobbies (ACH) is a retail outlet that sells remote-control race cars, better known as RC cars. Two of ACHs most popular products are the Night Crawler and the Lightening STK The Night Crawler is for RC car enthusiasts who are into scale crawling and night driving and the Lightening STK is equipped with on-road racing tires and four-wheel drive. The following sales and costing data are available for 2020:

	Night Crawler	Lightening STK
Actual units sold	13,365	16,335
Budgeted sales (units)	8,925	16,575
Actual selling price	$450	$270
Budgeted selling price	$485	$250
Actual contribution margin/unit	$295	$142
Budget contribution margin /unit	$290	$138

ACH subscribes to Market Data Forecast (MDF) which provides market forecasts for all RC car sales within ACHs sales regions. At the beginning of 2020 MDF forecast sales of RC cars within the sales area to be 510,000 units. ACHs planned market share of this amount was 5%. At the end of 2020, MDF reported actual sales in this area of 550,000 cars.

MDFs report stated that demand for RC cars spiked in the summer of 2020 and is forecast to do the same in 2021. The research indicated due to travel restrictions more individuals were staying home and spending on hobbies.

Required:

1. Calculate the following:
   1. Total sales volume variance for the contribution margin.
   2. Total sales-quantity variance for the contribution margin.
   3. Total sales-mix variance for the contribution margin. B. Calculate the market size and the market share variances.

2. Discuss the profitability of ACH in 2020. Your discussion should include the following (Remember to use pertinent data in your answer. )
   1. Overall profitability. What are the major changes from budget and what caused these changes?
   2. How the sales mix and sales quantity variances further explain the sales volume variance.
   3. How the market size and market share variances further explain the sales quantity variance.
   4. Provide the owner with one recommendation relating to 2021 sales. Consider where the company should focus their sales and/or their market research and why.