Andrews Chicken is a producer of poultry products that sells directly both to the wholesale market that serves restaurants and to large grocery chains. The chicken market is a solid one, with only minimal growth from one year to the next but steady demand. The competition for share, therefore, is quite rigorous, with price often being the only way to change share and hopefully profits. Price wars have broken out, much to the benefit of the grocery chains that use the items as loss leaders on a weekly basis. Sam Andrews, president of Andrews Chicken, has decided he needs to analyze actual sales performance against plan. He recruits you from your accounting class to come in and help him do the analysis, for which he will pay you generously. You accept, and Sam provides you with the following data.

REQUIRED:

a. Develop the industry volume variance.

b. Develop the market share variance.

c. Develop the selling price variance.

d. How would you describe Andrews Chicken’s performance over the past year? Please be specific.

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Andrews Chicken Line Item Budget Actud Industry volume 500,000,000 500,250,000 Market share 10.90% 11.12% Selling price $2.49 $2.25