Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three bars based on the prior year's product mix, again adjusted for planned changes for the coming year.

The following are the company budget and the results of operations for July.

Industry volume was estimated at 91.1 million bars for budgeting purposes. Actual industry volume for July was 81.990 million bars.

Required:

a. Determine the sales price and sales activity variances.

b. Break down the sales activity variance into the parts caused by industry volume and market share.

Chewy 3,000 bars $270 195 S 75 Budget Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs (all fixed) Operating profit Chunky 3,000 bars S600 495 $105 38 Choco-Lite 6,000 bars $960 780 $180 59 Total 12,000 bars $1,830 1,470 S 360 134 37 S 38 S 67 $121 S 226 57 169 S Actual Sales-units (in thousands) Sales-dollars (in thousands) Variable costs Contribution margin Manufacturing fixed cost Product margin Marketing and administrative costs Operating profit Chewy 2,400 bars $144 72 S72 40 Chunky 3,000 bars $ 600 525 $ 75 36 Choco-Lite 6,100 bars S960 759 S201 56 $145 Total 11,500 bars $1,704 1, 356 S 348 132 S 32 S 39 S 216 36 (all fixed) S 180