The Chair Company: Compute the sale-mix variance and the sales-quantity variance by type of chair, and in total. Also, compute the market-share variance and the market-size variance.
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VI. ( 8 pts.)
The Chair Company manufactures two modular types of chairs; one for the residential (home) market, and the other for the office market. Budgeted and actual operating data for the year 2001 are:
Static Budget_________ Actual Results______
Home __ Office_ _ Home_ _ Office__
Number of chairs sold 260,000 140,000 248,000 165,600
Contribution margin $26,000,000 $11,200,000 $22,356,000 $13,248,000
In late 2000, an office-products research firm estimated the industry volume for residential and office chairs of the type sold by the Chair company to be 2,400,000. Actual industry volume for the year 2001 was 2,200,000 chairs.
Required:
1. Compute the sale-mix variance and the sales-quantity variance by type of chair, and in total.
2. Compute the market-share variance and the market-size variance.
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