Island Spices manufactures and distributes high quality spices to gourmet food shops and top-quality restaurants. The firm buys its spices from various regions throughout the world. The spices are cleaned, processed, and packaged at the firm’s ultraclean factory before being shipped to customers. The following variances pertain to the last month of operations.
Sales volume variance .. $15,000 Favorable
Sales price variance ... 12,000 Unfavorable
Purchase price variance .. 8,000 Favorable
Labor efficiency variance ... 7,000 Favorable
Fixed cost spending variance .. 1,000 Favorable

Required:
a. Identify the critical success factors for Island Spices.
b. Suppose all of the above variances arose as a consequence of deliberate managerial actions such as cutting price to increase volume. Evaluate the fit of these actions with the overall corporate strategy and critical success factors.