Mountain Spring manufactures and sells varieties of sports drink (berry, lemon and orange) in bulk to Iupmarket. Budgeted and actual results for 2020l are as follows: Mountain Spring Income Statement Year Ended 30 June 2020 Mggt actual sales revenue $ 18,680,000 19,079,500 variable costs $ (11,400,000) (11,794,000) contribution margin $ 7,280,000 7,285,500 non-variable costs $ (5,580,000) (5,680,000) net operating prot 3 1,700,000 1,605,500 Product Breakdown Berry sales volume Boxes 500,000 400,000 selling price $ per box 7.00 6.90 variable costs $ per box (4.50) (4.40) contribution margin $ per box 2.50 2.50 Lemon sales volume Boxes 900,000 1,100,000 selling price $ per box 7.00 6.90 variable costs $ per box (4.00) (4.30) contribution margin 3 per box 3.00 2.60 Orange sales volume Boxes 1,110,000 1,105, 000 selling price $ per box 8.00 7.90 Orange sales volume Boxes 1,110,000 1,105,000 selling price $per box 8.00 7.90 variable costs $ per box (5.00) (4.80) contribution margin 3 per box 3.00 3.10 All Products Combined sales volume Boxes 2,510,000 2,605,000 market share 11 .409% 13. 025% selling price $ per box 7.44 7.32 variable costs $ per box (4.54) (4.53) contribution margin 3 per box 2.90 2.80 When preparing its budget for 2019, the company assumed that there would be a global market for 22,000,000 boxes of sports drinks and that Mountain Spring's product would have a 11.364% share of this market. However, a recent debate on sports drinks argue that while traditional sports drinks are designed to provide athletes with the right balance of carbohydrates, fluids and electrolytes during exercise, they do more harm than good, if you're just quenching a thirst. Because sports drinks contain high level of sugar. As a result, during 2019 both Mountain Spring and its competitors were adversely affected by diminishing consumer in sport drink products. The actual total market size was only 20,000,000 boxes. The Sales director of Mountain Spring recently explained how they attempted to respond to the difficulties which it faced in 2019: "First, we reduced our selling price for all products; this was a modest price reduction in comparison with those of our smaller competitors. Second, as a pilot project, we introduce natural ingredients such as natural sweetener to add value to our lemon sports drink. In doing so, we try to increase consumer confidence in the health of our product. Finally, to promote our new design lemon sports drink, we run several marketing campaigns as demonstrating the benefits of sports drinks, in particular, the health of our lemon sports drink (with all-natural ingredients) to the sport players.Sports drink Market Size\" actual budget boxes boxes Year Ended 30 June 2019 21,000,000 20,000,000 Year Ended 30 June 2020 20,000,000 I 22,000,000 II * The market in which Mountain Spring manufactures competes as a supplier of sports drink. budget actual sales revenue 18,680,000 19,079,500 variable costs (11,400,000) (11,794,000) contribution margin 7,280,000 7,285,500 non-variable costs 5,580,000) (5,680,000) net operating profit 1,700,000 1,605,500 oduct Breakdown Berry sales volume Boxes 500,000 400,000 selling price $ per box 7.00 6.90 variable costs $ per box (4.50) (4.40) contribution margin $ per box 2.50 2.50 Lemon sales volume Boxes 900,000 1, 100,000 selling price $ per box 7.00 6.90 variable costs $ per box (4.00) (4.30) contribution margin $ per box 3.00 2.60 Orange sales volume Boxes 1, 110,000 1, 105,000 selling price $ per box 8.00 7.90 variable costs $ per box (5.00) (4.80) contribution margin $ per box 3.00 3.10 All Products Combined sales volume Boxes 2,510,000 2,605,000 market share 11.409% 13.025% selling price $ per box 7.44 7.32 variable costs $ per box (4.54) (4.53) contribution margin $ per box 2.90 2.80budget vanance flexible budget vanance actual total vanance sales revenue 18,680,000 19,079,500 399,500 0.5 mark variable costs (11,400,000) (325,000) (11,725,000) (69,000) (11,794,000) (394,000) contribution margin 7,280,000 7,285,500 6,500 0.5 mark non-variable costs (5,580,000) (5,680,000) (100,000) 0.5 mark net operating profit 1,700,000 335,000 2,035,000 (429,500) 1,605,500 (94,500) Product Breakdown Berry sales volume Boxes 500,000 (100,000) 400,000 400,000 selling price $ per box 7.000 7.000 (0.100) 6.900 (0.100) variable costs $ per box (4.500) (4.500) 0.100 (4.400) 0.100 contribution margin $ per box 2.500 2.500 0.000 2.500 0.000 Lemon sales volume Boxes 900,000 1, 100,000 0.5 mark selling price $ per box 7.000 6.900 (0.100) 0.5 mark variable costs $ per box (4.000) (4.000) (0.300) (4.300) (0.300) contribution margin $ per box 3.000 3.000 (0.400) 2.600 0.400) Orange sales volume Boxes 1, 110,000 (5,000) 1, 105,000 1, 105,000 selling price $ per box 8.000 8.000 (0.100) 7.900 (0.100) variable costs $ per box (5.000) (5.000) 0.200 (4.800) 0.200 contribution margin $ per box 3.000 3.000 0. 100 3.100 0.100 All Products Combined sales volume Boxes 2,510,000 2,605,000 0.5 mark market share 11.409% 1.616% 13.025% 13.025% selling price $ per box 7.442 7.324 (0.118) 0.5 mark variable costs $ per box (4.542) (4.527) 0.014 0.5 mark contribution margin $ per box 2.900 0.023 2.923 (0.126) 2.797 (0.104)