Exam 12: Strategic Investment Decisions

The market share variance is favourable when the actual market share percentage is greater than the:

The market share variance reflects the difference between the budgeted market share percentage and the:

In analyzing sales variances, a question not related to the external market to assist in explaining the variances is:

Technical efficiency occurs when a business produces the maximum quantity of outputs for the minimum of inputs.

The sales price variance is calculated as (actual price - standard price) x actual volume sold.

The contribution sales mix variance examines the effects of changes in the sales mix given the standard contribution margin and standard quantity of units sold.

When an organization sells more than one product or service, the contribution margin sales volume variance can be broken into two more variances, the contribution margin sales mix variance and the contribution margin sales quantity variance.

The market size variance is also known as the:

The contribution margin sales volume variance is favourable when:

Given an actual market for ice cream of 64,000 litres, forecasted market for ice cream of 60,000 litres, actual sales of 3,200 litres, projected market share of 4.75%, and a standard contribution margin of $1.30. What is the market share variance?

The market share variance reflects the difference between the budgeted market share percentage and the actual market share percentage achieved for the standard contribution margin.

Paris Perfumery sells two perfumes, L'Amour and Plaisir. The expected sales mix is one bottle of L'Amour to five bottles of Plaisir. Planned sales and variable costs for last period were as follows: During the period there was an economic downturn. Sales of L'Amour dropped off, so Paris reduced its price. Actual sales were as follows: The sales price variance for L'Amour was:

Given an actual market for ice cream of 64,000 litres, forecasted market for ice cream of 60,000 litres, actual sales of 3,200 litres, projected market share of 4.75%, and a standard contribution margin of $1.30. What is the contribution margin variance?

The contribution margin sales quantity variance is divided into market share variance and market size variance.

Paris Perfumery sells two perfumes, L'Amour and Plaisir. The expected sales mix is one bottle of L'Amour to five bottles of Plaisir. Planned sales and variable costs for last period were as follows: During the period there was an economic downturn. Sales of L'Amour dropped off, so Paris reduced its price. Actual sales were as follows: The contribution margin sales mix variance was:

The Sage and Thyme Company determine the partial productivity factor of their drying machine in drying basil leaves. The drying machine produces 1,500 bags of dried basil leaves using 79.5 kilograms of basil. The productivity factor for basil is:

The yield variance is unfavourable when less input is used than specified by the standard for the actual quantity of final product produced.