Big Spring Brewery (BSB) makes two specialty beers in its micro-brewery: Big Springs Ale and Dark Springs, BSB's dark beer.

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.

The budget was prepared with the expectation that the currency exchange rate would be $1.29 per Euro. The actual average exchange rate for the period reflected the falling dollar, at $1.42 per Euro.

Required

1. What is the market share variance?

2. What is the market size variance?

3. Explain possible reasons for these variances, including a consideration of the effect of the change in the currency exchange rate for the dollar and theEuro.

BudgetedWt Avg CM Budget Actual Sales units (cases) 21,575 Domestic 22,000 Export 12,000 15,225 Total 34,000 36,800 Price per case $ 88 Domestic S8 Export 90 92 Variable cost per case Domestic 62 62 Export 68 68 Contribution margin per case Domestic 26 25 Export 22 24 Total contribution margin Domestic $572,000 $539,375 $24.588 Export $264,000 $365,400 Industry Budget Industry Actual Sales units Domestic 915,250 924,550 Export 659,500 645,750