Downunder Electronics, Inc., produces hand-held Windows XEE compatible organizers. Aussie Infonautics markets three different handheld models. FrioPro is a souped- up version for the executive on the go; FrioCE is a consumer- oriented version; and FrioKid is a stripped- down version for the young adult market. You are Downunder Electronics senior vice president of 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 results are different from the budget. Budgeted and actual operating data for the companys third quarter of 2010 are as follows:

	Selling Price	Variable Cost per Unit	Contribution Margin per Unit	Sales Volume in Units
FrioPro	$ 379	$ 182	$ 197	12,500
FrioCE	269	98	171	37,500
FrioKid	149	65	84	50,000
				100,000

Actual Operating Data, Third Quarter 2010

	Selling Price	Variable Cost per Unit	Contribution Margin per Unit	Sales Volume in Units
FrioPro	$ 349	$ 178	$ 171	11,000
FrioCE	285	92	193	44,000
FrioKid	102	73	29	55,000
				110,000

Part 1:

Compute the actual and budgeted contribution margins in dollars for each product and in total for the third quarter of 2010.

Calculate the actual and budgeted sales mixes for the three products for the third quarter of 2010.

Calculate total sales- volume, sales- mix, and sales- quantity variances for the third quarter of 2010. (Calculate all variances in terms of contribution margins.)

Given that your CEO is known to have temper tantrums, you want to be well prepared for this meeting. In order to prepare, write a paragraph or two comparing actual results to budgeted amounts.

Part 2:

Market- share and market- size variances (continuation of above). Downunder Electronics senior vice president of marketing prepared his budget at the beginning of the third quarter assuming a 25% market share based on total sales. The total handheld- organizer market was estimated by Iwonderwhy Research to reach sales of 400,000 units worldwide in the third quarter. However, actual sales in the third quarter were 500,000 units.

Calculate the market- share and market- size variances for Downunder Electronics in the third quarter of 2010 (calculate all variances in terms of contribution margins).

Explain what happened based on the market-share and market- size variances.

Given the following information of global budgeted and actual market size for the three products, calculate the market-share and market-size variances for the company.

	Budgeted Market	Actual Market
FrioPro	50,000	40,000
FrioCE	100,000	150,000
FrioKid	250,000	310,000
Total	400,000	500,000