Endeavour Company is Morse Products' largest customer. A variance analysis of customer profitability prepared by Morse for Endeavour Company revealed a favorable customer purchase volume variance and an unfavorable market share variance. This means that:
A) Endeavour purchased less than Morse planned.
B) Morse increased its share of Endeavour's business but Endeavour's total purchases declined.
C) Endeavour's purchases of the products sold by Morse exceeded the amount budgeted by Morse, but a smaller fraction of those purchases than expected were from Morse.
D) Endeavour Company had a positive impact on Morse's profitability for the period analyzed.

Question

Quizplus · Accepted Answer

C) Endeavour's purchases of the products sold by Morse exceeded the amount budgeted by Morse, but a smaller fraction of those purchases than expected were from Morse. This is indicated by the favorable customer purchase volume variance (Endeavour bought more than planned) and the unfavorable market share variance (Morse secured a smaller share of Endeavour's total purchases than expected).

Endeavour Company Is Morse Products' Largest Customer