Question

Diane’s Designs is a small business run out of its owner’s house. For the past 6 months, the company has been selling two products, a welcome sign and a birdhouse. The owner has been concerned about the company’s marketing effectiveness. The master budget and actual results for March of this year follow:

	Master Budget
	Welcome Sign				Birdhouse				Total
Units		170				140				310
Sales	$	3,400			$	1,400			$	4,800
Variable costs		2,720				630				3,350
Contribution margin	$	680			$	770			$	1,450
Fixed costs		75				75				150
Operating income	$	605			$	695			$	1,300

	Actual Results
	Welcome Sign				Birdhouse				Total
Units		160				150				310
Sales	$	2,400			$	1,800			$	4,200
Variable costs		735				363				1,097
Contribution margin	$	1,665			$	1,437			$	3,103
Fixed costs		75				75				150
Operating income	$	1,590			$	1,362			$	2,953

The total market for welcome signs for each of the last 6 months was 500 budgeted and 500 actual. Diane expected the total market for birdhouses to be 1,120 units per month; the actual volume for the entire market, however, turned out to be only 750 units per month.

Required:

1. Compute Diane’s actual market share for welcome signs and birdhouses.

2. What is the market share contribution margin variance? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown. Do not round intermediate calculations. Round your answers to 2 decimal places.)

3. What is the market size contribution margin variance? (Leave no cell blank; if there is no effect enter "0" and select "None" from dropdown. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Answer 1