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Sales activity variance Market share variance Industry volume variance

Sales activity variance Market share variance Industry volume variance

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Exercise 17-28 (Algo) Industry Volume and Market Share Variances (LO 17-3) Piper Products sold 422,000 units during the last period when industry volume totaled 2.96 million units. The company originally expected to sell 458,500 based on a budgeted market share of 15 percent. The budgeted selling price was $14 per unit. Budgeted variable costs were $6 per unit. Budget fixed costs were $1,930,000 and applied based on units produced. Required: Compute the sales activity variance, and break it down into market share variance and the industry volume variance. Note: Do not round intermediate calculations. 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. Sales activity variance Market share variance Industry volume variance
Transcribed Image Text:Exercise 17-28 (Algo) Industry Volume and Market Share Variances (LO 17-3) Piper Products sold 422,000 units during the last period when industry volume totaled 2.96 million units. The company originally expected to sell 458,500 based on a budgeted market share of 15 percent. The budgeted selling price was $14 per unit. Budgeted variable costs were $6 per unit. Budget fixed costs were $1,930,000 and applied based on units produced. Required: Compute the sales activity variance, and break it down into market share variance and the industry volume variance. Note: Do not round intermediate calculations. 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. Sales activity variance Market share variance Industry volume variance
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