Advanced. The following data relate to both questions

(a) and (b).

A company has budgeted to produce and sell 15000 units per annum of a singlé product. The budgeted market size for this product is 75000 units per annum. The budgeted information per unit is as follows:

In the period covered by the budget, the following actual results were recorded:
13000 units 10 per cent lower than previously forecast Production and sales Industry sales

(a) The market size variance, calculated on a contribution per unit basis is:
(A) £40 000 adverse (B) £40 000 favourable (©) £120 000 adverse (B) £120 000 favourable (E) £160 000 adverse

(b) The market share variance, calculated on a contribution per unit basis is:
(A) £40 000 adverse (B) £40 000 favourable (C) £120 000 adverse (D) £120 000 favourable (E) £160 000 favourable

Transcribed Image Text:

Selling price 125 Standard cost: Direct materials 20 Direct labour 15 Variable overhead 10 Fixed overhead 5 Standard profit 75