The Payne Company manufactures two types of vinyl flooring. Budgeted and actual operating data for 2020 are as follows:

In late 2019, a marketing research firm estimated industry volume for commercial and residential vinyl flooring for 2020 at 800,000 rolls. Actual industry volume for 2020 was 700,000 rolls.

Required:

1. Compute the sales-mix variance and the sales-quantity variance by type of vinyl flooring and in total. (Compute all variances in terms of contribution margins.)
2. Compute the market-share variance and the market-size variance.
3. What insights do the variances calculated in requirements 1 and 2 provide about Payne Company’s performance in 2020?

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Unit sales in rolls Contribution margin Static Budget Commercial Residential Total 20,000 60,000 80,000 $10,000,000 $24,000,000 $34,000,000 Actual Results Commercial Residential 25,200 58,800 84,000 $11,970,000 $24,696,000 $36,666,000 Total