The Market-Share Variance Is the Difference in Budgeted Contribution Margin

question 61

True/False

The market-share variance is the difference in budgeted contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

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Definitions:

External Market Price

The price at which goods or services are bought and sold outside of a company, determined by the supply and demand in the wider market.

Savings

The portion of income not spent on current expenditures or taxes, often set aside for future use or investment.

Excess Capacity

A scenario where a company's production facilities are capable of producing more than is needed to meet the demand.

Market-Based Transfer Prices

Transfer prices set based on market prices for similar goods or services, used in transactions between company divisions.