Peninsula Candy Company makes three types of candy bars: Chewy, Chunky, and Choco-Lite (Lite). Sales volume for the annual budget is determined by estimating the total market volume for candy bars and then applying the company's prior year market share, adjusted for planned changes due to company programs for the coming year. Volume is apportioned among the three bars based on the prior year's product mix, again adjusted for planned changes for the coming year.

The following are the company budget and the results of operations for July.

Industry volume was estimated at 80 million bars for budgeting purposes. Actual industry volume for July was 76 million bars.
Required
a. Prepare an analysis to show the effects of the sales price and sales activity variances.
b. Break down the sales activity variance into the parts caused by industry volume and marketshare.

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Chewy Chunky Choco-Lite Total Budget Sales-units (in thousands). 2.000 bars 2,000 bars 4,000 bars 8,000 bars Sales-dollars (in thousands).. .$200 --..140 60 40 $600 460 S140 60 80 $1,200 920 S 280 140 S 140 $400 320 $ 80 40 Contribution margin Product margin Marketing and administrative 20 40 50 costs (all fixed).... Operating profit $ 90 Sales-units (in thousands). Sales-dollars (in thousands) 1,600 bars 2,000 bars 4,200 bars 7,800 bars $162 $600 464 $136 63 73 $1,162 898 S 264 S400 322 78 34 112 Contribution margin 149 Manufacturing fixed cost Product margin. Marketing and administrative 42 $ 116 costs (all fixed) Operating profit. .. S 60