A company manufactures a specific clinical machine used in hospitals. The company holds a 2% share of the market and the total market demand has been constant at 250,000 machines for the last few years. The budgeted selling price for each machine is $10,000 and standard contribution is equivalent to 10% of the budgeted selling price. An initial performance review of the company’s actual results showed a sales volume of 5,600 machines had been achieved. The total market demand for the machines, though, had risen to 300,000 units. What is the market share variance for the clinical machines?
A、$200,000 favourable
B、$400,000 adverse
C、$600,000 favourable
D、$1,000,000 adverse
A、$200,000 favourable
B、$400,000 adverse
C、$600,000 favourable
D、$1,000,000 adverse
【参考答案及解析】
Market share variance compares revised sales volume to actual sales volume. Revised sales volume (300,000 units × 2%) = 6,000 units Actual sales volume = 5,600 units Difference = 400 units adverse Valued at standard contribution of $1,000 Variance = $400,000 adverse
Market share variance compares revised sales volume to actual sales volume. Revised sales volume (300,000 units × 2%) = 6,000 units Actual sales volume = 5,600 units Difference = 400 units adverse Valued at standard contribution of $1,000 Variance = $400,000 adverse