Question

I need a step by step explanation to the following problem in order to make me understand the solution:

Use the following information for Brief Exercises 16-23 through 16-25. CompuWorld Sells two products, R66 and R100, and calculates sales variances using contribution margin. Pertinent data for the current year follow:

	Budgeted				Actual
	R66		R100		R66		R100
Selling Price	50		160		55		155
Variable cost per unit	40		90		43		95
Contribution margin	10		70		12		60
Fixed cost per unit	6		30		5		25
Operating income	4		40		7		35
Sales in units	$1,200		$400		$1,000		$1,000

16-26

What is the market size variance?

$51,000F

$68,000F

$71,400F

Answer 1

Sales volume variance=	(Actual Units- Budgeted Units )*Budgeted price	R66	R100
Actual Units		1000	1000
Budgeted Units		1200	400
Budgeted price		50	160
Sales volume variance=		-10000	96000
Selling price variance=	(Actual SP- Budgeted SP)*Actual Units	R66	R100
Actual SP		55	155
Budgeted SP		50	160
Actual Units		1000	1000
Selling price variance=		5000	-5000
Sales mix variance=	(Actual Units- Budgeted Units )* Budgeted Contribution per Unit	R66	R100
Actual Units		1000	1000
Budgeted Units		1200	400
Budgeted Contribution per Unit		10	70
Selling price variance=		-2000	42000

Note:

1. In absence of the Market Share data 2nd part of the question is not solved

2. I have assumed that in the last line of the table sales units is given