Reference no: EM132520459

The Chair Company manufactures two modular types of chairs, one for the residential market, and the other for the office market. Budgeted and actual operating data for the year 20x3 are:

                                               Static            Budget                   Residential Office

Total Number of chairs sold                 260,000     140,000              400,000

Contribution margin                         $26,000,000     $11,200,000            $37,200,000

Actual Results Residential Office

Total Number of chairs sold                 248,400        165,600                            414,000

Contribution margin                         $22,356,000       $13,248,000               $35,604,000

• Prior to the beginning of the year, an office products research firm estimated the industry volume for residential and office chairs of the type sold by the Chair Company to be 2,400,000. Actual industry volume for the year 20x3 was only 2,200,000 chairs.

Required:

Question 1: Compute the following variances in terms of contribution margin. a. Compute the total sales-volume variance, Compute the sale-mix variance and the sales-quantity variance by type of chair, and in total. Compute the market-share variance and market-size variance.