1.Variance analysis, working backward.The Hiro Corporation sells two brands of wine glasses: Plain and Chic. Hiro provides the following information for sales in the month of June 2014:

Required

Static-budget total contribution margin $15,525

Budgeted units to be sold of all glasses 2,300 units

Budgeted contribution margin per unit of Plain $5 per unit

Budgeted contribution margin per unit of Chic $12 per unit

Total sales-quantity variance $2,700 U

Actual sales-mix percentage of Plain 60%

All variances are to be computed in contribution-margin terms.

  1. Calculate the sales-quantity variances for each product for June 2014.
  2. Calculate the individual-product and total sales-mix variances for June 2014. Calculate the individual-
  3. product and total sales-volume variances for June 2014.
  4. Briefly describe the conclusions you can draw from the variances.

2. Market-shareandmarket-sizevariances(continuationof14-25).Soda-Kingpreparedthebudget for 2014 assuming a 12.5% market share based on total sales in the western region of the United States. The total soft drinks market was estimated to reach sales of 10 million cartons in the region. However, actual total sales volume in the western region was 12.3 million cartons.

Calculate the market-share and market-size variances for Soda-King in 2014. (Calculate all variances in terms of contribution margin.) Comment on the results.