The market size variance is favorable when the budgeted industry sales in units is:
A)more than the actual units sold
B)less than the actual units sold
C)more than the actual market share percentage
D)less than the budgeted market share percentage

Question

Quizplus · Accepted Answer

The market size variance compares the budgeted industry sales in units with actual units sold. Therefore, a favorable variance occurs when the budgeted sales are less than actual sales. This suggests that the company has outperformed their expectations and may have gained market share, leading to higher sales than anticipated.

The Market Size Variance Is Favorable When the Budgeted Industry