The correct answers are:
Sales volume variance: $ 8,000
Market size variance: $ 216,750
Market share variance $ 158,950
Sales volume variance:
The answer is 8,000 (A).
|
|
Actual sales |
Budgeted sales |
Difference |
Standard margin |
Variance |
|
|
units |
units |
units |
$ |
$ |
|
A |
12,000 |
16,000 |
4,000 (A) |
20 |
80,000 (A) |
|
B |
14,000 |
14,000 |
- |
12 |
- |
|
C |
18,000 |
10,000 |
8,000 (F) |
9 |
72,000 (F) |
|
|
44,000 |
40,000 |
4,000 (F) |
|
8,000 (A) |
Market size variance:
Budgeted market share % = 40,000 / 400,000 = 10%
Total market sales volume variance = 550,000 units produced - 400,000 units budgeted = 150,000 units (F)
Standard weighted average margin per unit = $14.45 per unit
Market size variance = 150,000 (F) x 10% x $14.45 = $216,750 (F)
Market share variance:
Budgeted market share = 10%
Actual market share = 44,000 / 550,000 = 8%
Variance = 8% - 10% = 2% (A)
Market share variance = 2% (A) x 550,000 units x $14.45 = $158,950 (A)
