Please do not give solution in image format thanku Exercise 17-27 (Algo) Industry Volume and Market Share Variances (LO17-3)Logan Passport Services budgeted sales of 8,500 units of its Basic Visa Service (BVS). Thiswas based on its estimated 5 percent share of this service in the relevant regional market.Actual sales of the BVS for Logan totaled 11,450 units on total industry volume of 150,000unit for this service. The budgeted contribution margin for BVS is $90 per unit. The actualcontribution margin for BVS was $97.Required:Compute the sales activity variance, and break it down into market share variance and theindustry volume variance.Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" forunfavorable. If there is no effect, do not select either option.Sales activity varianceMarket share varianceIndustry volume variance

Sales activity variance- It refers to assessing sale performance by analyzing the difference between…

Answered: Compute the sales activity variance,…

Business

Accounting

Compute the sales activity variance, and break it down into market share variance and the industry volume variance.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 9CE: Budgeted unit sales for the entire countertop oven industry were 2,500,000 (of all model types), and...

See similar textbooks

Similar questions

Budgeted income statement and supporting budgets The budget director of Jupiter Helmets Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for May: Prepare a cost of goods sold budget for May. Work in process at the beginning of May is estimated to be $4200. and work in process at the end of May is desired to be $3800.
Budgeted unit sales for the entire countertop oven industry were 2,500,000 (of all model types), and actual unit sales for the industry were 2,550,000. Recall from Cornerstone Exercise 18.6 that Iliff, Inc., provided the following information: Required: 1. Calculate the market share variance (take percentages out to four significant digits). 2. Calculate the market size variance. 3. What if Iliff actually sold a total of 41,000 units (in total of the two models)? How would that affect the market share variance? The market size variance?
Static budget versus flexible budget The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year: The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-July have been significantly less than the monthly static budget of2,358,000. However, the plant manager believes that the budget should not remain fixed for every month but should flex or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: a. Prepare a flexible budget for the actual units produced for May, June, and July in the MachiningDepartment. Assume depreciation is a fixed cost. b. Compare the flexible budget with the actual expenditures for the first three months.What does this comparison suggest?
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following. At the end of the year, actual sales revenue for Product R and Product S was 3,075,000 and 3,254,000, respectively. The actual price charged for Product R was 25 and for Product S was 20. Only 10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled 540,000 for this product. Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget. 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product?
Preparing a performance report Use the flexible budget prepared in P7-6 for the 29,000-unit level of activity and the actual operating results listed below for the 29,000- unit level. Required: 1. Prepare a performance report. 2. List the major reasons why the actual operating income at 29,000 units differs from the master budget operating income at 30,000 units in Figure 7-12. 3. Given the level at which the company operated, how was its cost control? Item Direct materials: Direct labor:
Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level and the actual operating results listed below for the 31,000-unit level. Required: 1. Prepare a performance report. 2. List the major reasons why the actual operating income at 31,000 units differs from the master budget operating income at 30,000 units in Figure 7-12. 3. Given the level at which the company operated, how was its cost control? Item Direct materials: Direct labor:
Rosenberry Company computed the following revenue variances for January: Revenue price variance (350,000) Favorable Revenue volume variance50,000 Unfavorable Assuming that the planned selling price per unit was 10 and that actual sales were 175,000 units, determine the following: a. Actual selling price of January. b. Planned number of units that were to be sold in January.
E8-16 Determining Budgeted Overhead ( The overhead application rate for a company is $10per unit, made up of $6per unit of fixed overhead and $4per unit of variable over-head. Normal capacity is 11,000units. In one month,there was a favorable flexible budget variance of $2,750 Actual overhead for the month was $119,750 and actual units produced were 14,125. Based on this information, determinethe amount of the budgeted overhead for the actual level of production.
Market-share and market-size variances (continuation of 14-38). Miami Infonautics’ senior vice president of marketing prepared his budget at the beginning of the third quarter assuming a 25% market share based on total sales. Foolinstead Research estimated that the total handheld-organizer market would reach sales of 408,600 units worldwide in the third quarter. However, actual sales in the third quarter were 515,000 units.
D&B Ice Cream budgeted sales of 136,288 units of flavor C, assuming that the company would have 16 percent of 851,800 units sold in a particular market. The actual results were 126,630 units, based on a 14 percent share of a total market of 904,500 units. The budgeted contribution margin is $5.10 per unit. Required: Compute the sales activity variance, and break it down into market share variance and the industry volume variance. (Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Enter your answers rounded to the nearest whole dollar.)
13. Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,900 units, but its actual level of activity was 5,860 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Fixed element per month Variable element per unit Revenue $ 0 $ 29.30 Direct labor $ 0 $ 3.90 Direct materials 0 10.00 Manufacturing overhead 39,000 1.20 Selling and administrative expenses 24,600 0.40 Total expenses $ 63,600 $ 15.50 Actual results for June: Revenue $ 176,358 Direct labor $ 22,310 Direct materials $ 56,330 Manufacturing overhead $ 45,917 Selling and administrative expenses $ 26,989 The activity variance for net operating income in June would be closest to: Multiple Choice $552 F $6,992 U $6,992 F $552 U
Flexible-Budget Variances and Sales Volume Variances RTI Company’s master budget calls forproduction and sale of 18,000 units for $81,000, variable costs of $30,600, and fixed costs of $20,000.During the most recent period, the company incurred $32,000 of variable costs to produce and sell20,000 units for $85,000. During this same period, the company earned $25,000 of operating income.Required1. Determine the following for RTI Company (Round all answers to the nearest whole dollar):a. Flexible-budget operating income.b. Flexible-budget variance, in terms of contribution margin. Was this variance favorable (F) orunfavorable (U)?c. Flexible-budget variance, in terms of operating income. Was this variance favorable (F) or unfavorable (U)? d. Sales volume variance, in terms of contribution margin. Was this variance favorable (F) or unfavorable (U)? e. Sales volume variance, in terms of operating income. Was this variance favorable (F) or unfavorable (U)? 2. Explain why the contribution…