Question
Required information Skip to question [The following information applies to the questions displayed below.] Tall Pines Brewery (TPB) makes two specialty beers in its microbrewery:
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[The following information applies to the questions displayed below.]
Tall Pines Brewery (TPB) makes two specialty beers in its microbrewery: Golden Ale and Dark Ale. Both beers sell for the same price per case in the U.S. market and in the export market. The latter market is primarily European countries. Both beers also have the same variable production costs, though the export product has slightly higher variable costs due to shipping and other distribution costs associated with the export beers. The price, cost, and market information for the two beers are shown below:
Budgeted | Actual | Budgeted Weighted Average CM | |
---|---|---|---|
Sales units (cases) | |||
Domestic | 27,000 | 27,350 | |
Export | 17,000 | 19,500 | |
Total | 44,000 | 46,850 | |
Price per case | |||
Domestic | $ 98 | $ 97 | |
Export | 100 | 102 | |
Variable cost per case | |||
Domestic | $ 67 | $ 67 | |
Export | 78 | 73 | |
Contribution margin per case | |||
Domestic | $ 31 | $ 30 | |
Export | 22 | 29 | |
Total contribution margin | |||
Domestic | $ 837,000 | $ 820,500 | |
Export | 374,000 | 565,500 | $ 27.5227 |
Industry Budget | Industry Actual | |
---|---|---|
Sales units (cases) | ||
Domestic | 926,500 | 949,550 |
Export | 655,400 | 665,750 |
The budget was prepared with the expectation that the currency exchange rate would be $1.34 per euro. The actual average exchange rate for the period reflected the falling dollar, at $1.52 per euro.
Required:
1. What is the contribution margin market share variance?
2. What is the contribution margin market size variance?
3. What are the selling price variance and sales volume variance?
4. What are the sales mix variance and sales quantity variance?
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