Twitter Company manufactures a remote control device for home theaters

Management Apr 25, 2021

Twitter Company manufactures a remote control device for home theaters. The following data were from the operating period just completed:

Actual market size (units) 25,000 Budgeted market size (units) 24,000 Actual market share 23% Budgeted market share 20% Budgeted selling price per unit $ 71 Actual selling price per unit $ 66 Budgeted variable cost per unit $ 25 Actual variable cost per unit $ 13
What is the firm's market size variance?

Expert Solution

Computation of Market Size Variance:

Market Size Variance = (Actual market size-Budgeted market size)*Budgeted market share*Budgeted contribution margin per unit

= (25000-24000)*20%*(71-25)

= 1000*20%*46

Market Size Variance = 9200 Favourable

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