Question : 41) The (the difference between the actual market size in : 1186069

 

41) The (the difference between the actual market size in units and the budgeted market size in units) times (the budgeted market share) times (budgeted contribution margin per composite unit for the budgeted mix) is called the

A) budgeted market-size variance.

B) budgeted market-share variance.

C) market-share variance.

D) market-size variance.

E) sales quantity variance.

Use the information below to answer the following question(s).

 

Remote Company manufactures remote control devices for electronic equipment. The following information was collected during June:

 

Actual market size (units)

20,000

Budgeted market size (units)

22,500

Actual market share

34%

Budgeted market share

32%

Budgeted selling price

$12.00

Actual selling price

$10.50

Budgeted cont. margin per unit

$4.00

Actual cont. margin per unit

$3.00

 

42) What is the company’s market-share variance?

A) $1,600 unfavourable

B) $1,600 favourable

C) $2,560 favourable

D) $1,200 unfavourable

E) $1,200 favourable

 

43) What is the company’s market-size variance?

A) $4,800 favourable

B) $3,200 favourable

C) $2,400 favourable

D) $2,400 unfavourable

E) $3,200 unfavourable

Answer the following questions using the information below:

 

Zorro Company manufactures remote control devices for garage doors. The following information was collected during June:

 

Actual market size (units)10,000

Actual market share32%

Actual average selling price$10.00

Budgeted market size (units)11,000

Budgeted market share30%

Budgeted average selling price$11.00

Budgeted contribution margin per

composite unit for budgeted mix$5.00

 

44) What is the market-size variance?

A) $500 U

B) $1,500 U

C) $1,600 F

D) $1,000 F

E) $1,500 F

 

45) What is the market-share variance?

A) $1,000 F

B) $1,100 F

C) $500 U

D) $1,500 U

E) $1,000 U

 

46) What is the sales-quantity variance?

A) $1,500 U

B) $1,000 F

C) $500 U

D) $2,500 U

E) $500 F

47) If the market-size variance is $400 U and the sales-mix variance is $700 F, and the market share variance is $300 F, we know that which of the following is true?

A) The sales-quantity variance is $100 U.

B) The sales volume variance is $600 F.

C) The sales-quantity variance is $100 U, and the sales volume variance is $600 F.

D) The sales volume variance is $600 U.

E) The sales volume variance is $600 F, and the sales-quantity variance is $100 F.

 

48) Which of the following is the best reason(s) for a company to give a price discount to customer?

A) gave discount in the past

B) increase sales person bonus

C) name recognition of the customer and volume purchases

D) to enable cost tracing to a specific customer

E) to enable cost tracing to a specific product

 

49) Big Products sells only one product. Last year it sold 22,000 items when the budget was 16,000 items. The increased sales were due in part to reduced selling prices averaging $52. The budgeted selling price was $60. Total variable costs were budgeted at $144,000 .

 

Required:

Compute the contribution margin sales-volume variance. Why doesn’t the contribution sales volume variance equal the difference between budgeted and actual revenue?