Saturday, May 26, 2012

1. What is the market-size variance

ACCOUNTING

Multiple Choice

The Sasita Corporation manufactures two types of vacuum cleaners, the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year 20x3 were as follows:


Static Budget ZENITH House-Helper Total

Number sold 5,000 20,000 25,000

Contribution margin $1,500,000 $3,000,000 $4,500,000



Actual Results ZENITH House-Helper Total

Number sold 4,000 28,000 32,000

Contribution margin $1,280,000 $3,920,000 $5,200,000


Prior to the beginning of the year, a consulting firm estimated the total volume for vacuum cleaners of the ZENITH and House-Helper category to be 250,000 units, but actual industry volume was 256,000 units.


What is the market-size variance?

a. $1,152,000 F

b. $108,000 F

c. $360,000 U

d. $1,260,000 F

Click here for the SOLUTION

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