Twitter Company manufactures a remote control device for home theaters.The following data were from the operating period just completed:
What is the firm's market size variance?
A)$2,440 favorable.
B)$3,600 favorable.
C)$5,550 favorable.
D)$6,000 favorable.
E)$6,300 favorable.

Question

Twitter Company manufactures a remote control device for home theaters.The following data were from the operating period just completed: 
What is the firm's market size variance?
A)$2,440 favorable. 
B)$3,600 favorable. 
C)$5,550 favorable. 
D)$6,000 favorable. 
E)$6,300 favorable.

Quizplus · Accepted Answer

The market size variance can be calculated using the formula: (Actual Units Sold - Budgeted Units Sold) x Budgeted Selling Price. 
In this case, the actual units sold were 3,000 (given in the question). The budgeted units sold were 2,500 (given in the previous question). The budgeted selling price was $12 (given in the previous question). 
So, the market size variance would be: (3,000 - 2,500) x $12 = $6,000 favorable. 
Therefore, the correct answer is option B, $3,600 favorable.

Twitter Company Manufactures a Remote Control Device for Home Theaters