Diane's Designs is a small business run out of its owner's house. For the past six 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:

The total market for welcome signs for the last six months was 3,000 budgeted and 3,000 actual. Diane expected the total market for birdhouses to be 200 units per month; the actual volume for the entire market, however, turned out to be only 175 units per month.

Required
Round all calculations to four decimal places after the decimal point.
1. Compare Diane's Designs' market share for welcome signs and birdhouses.
2. What is the market share contribution margin variance?
3. What is the market size contribution margin variance?
4. Explain possible reasons for these variances.

Transcribed Image Text:

Master Budget Total 75 $1,250 1,010 S 240 150 Welcome Sign Birdhouse Units 50 S1,000 890 S 110 75 25 Sales Variable costs $250 120 Contribution margin Fixed costs $130 75 Operating income Actual Results Welcome Sign Birdhouse Total Units Sales Variable costs Contribution margin Fixed costs Operating income 45 $675 $A20 $ 95 $150 S 245 S 20 S 95