II. SALES VARIANCE ANALYSISThe Furniluxe manufactures two types of study desk: one for the residential market, and the other forthe school market. Budgeted and actual operating data for the year 2022 are:Static BudgetNumber of desk soldContribution marginResidentialSchool390,000$39,000,000210,000$16,800,000Total600,000$55,800,000SchoolTotal580,000$48,720,000Actual ResultsResidentialNumber of desk soldContribution margin232,000348,000$20,880,000$27,840,000The Furnilixe prepared the budget for 2022 assuming a 15% market share based on total desk sales inthe region. The total desk market was estimated to reach sales of 4,000,000 desks. However, actualtotal sales volume was 3,625,000 desks.Required:Compute the following variances in terms of contribution margin:1. Compute the total sales-volume variance. (3%)2. Compute the sales-mix variance and the sales-quantity variance by type of desk. (7%)3. Compute the market share variance and the market size variance. (5%)4. Provide possible explanation on the result! (5%)

Furniluxe manufactures two types of study desks - one for the residential market other for the…

Required: Compute the following variances in terms of contribution margin: 1. Compute the total sales-volume variance. (3%) 2. Compute the sales-mix variance and the sales-quantity variance by type of desk. (7%)

Required: Compute the following variances in terms of contribution margin: 1. Compute the total sales-volume variance. (3%) 2. Compute the sales-mix variance and the sales-quantity variance by type of desk. (7%)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

II. SALES VARIANCE ANALYSIS
The Furniluxe manufactures two types of study desk: one for the residential market, and the other for
the school market. Budgeted and actual operating data for the year 2022 are:
Static Budget
Number of desk sold
Contribution margin
Residential
School
390,000
$39,000,000
210,000
$16,800,000
Total
600,000
$55,800,000
School
Total
580,000
$48,720,000
Actual Results
Residential
Number of desk sold
Contribution margin
232,000
348,000
$20,880,000
$27,840,000
The Furnilixe prepared the budget for 2022 assuming a 15% market share based on total desk sales in
the region. The total desk market was estimated to reach sales of 4,000,000 desks. However, actual
total sales volume was 3,625,000 desks.
Required:
Compute the following variances in terms of contribution margin:
1. Compute the total sales-volume variance. (3%)
2. Compute the sales-mix variance and the sales-quantity variance by type of desk. (7%)
3. Compute the market share variance and the market size variance. (5%)
4. Provide possible explanation on the result! (5%)

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