Emcee Inc. manufactures and sells two fruit drinks: Kostor and Limba. Budgeted and actual results for 2017 are as follows:

Budget for 2017

Product Selling Price Variable Cost per Carton Cartons Sold

Kostor 12.00 7,20 130,000

Limba 15.00 8.25 120,000

Actual for 2017

Selling Price Variable cost per Carton Cartons Sold

12.50 8.00 132,000

16.00 7.75 108,000

1. Compute the total sales-volume variance, the total sales-mix variance, and the total sales-quantity

variance. (Calculate all variances in terms of contribution margin.) Show results for each product in

your computations.

2. What inferences can you draw from the variances computed in requirement 1?

Part 2. Emcee Inc. prepared the budget for 2017 assuming a 20% market share based on total sales in the Midwest region of the United States. The total fruit drinks market was estimated to reach sales of 1.25 million cartons in the region. However, actual

total sales volume in the western region was 1.5 million cartons.Calculate the market-share and market-size variances for Emcee Inc. in 2017. (Calculate all variances in terms of contribution margin.) Comment on the results.