Twitter Company Manufactures a Remote Control Device for Home Theaters

question 130

Multiple Choice

Twitter Company manufactures a remote control device for home theaters. The following data were from the operating period just completed: $\begin{array}{lll}\text { Actual market size (units) } & 12,000 \\\text { Budgeted market size (units) } & 11,000 \\\text { Actual market share } & 15 \% \\\text { Budgeted market share } & 12 \%\\\text { Budgeted selling price per unit } & \$ 60 \\\text { Actual selling price per unit } & \$ 55 \\\text { Budgeted variable cost per unit } & \$ 30 \\\text { Actual variable cost per unit } & \$ 18\end{array}$ What is the firm's market share variance?

• A) $10,800 favorable.
• B) $11,200 favorable.
• C) $12,4000 favorable.
• D) $12,600 favorable.
• E) $13,200 favorable.

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Definitions:

Firm Commitment

An agreement between a buyer and an underwriter in which the underwriter guarantees the sale of a certain amount of securities.

Cash Flow Hedge

A hedging strategy used to manage risk associated with variability in cash flows, typically related to interest rates or currency exchange rates.

Inventory Purchase

The process of acquiring goods that a company will sell to customers or use in the production of goods to be sold.

Forward Contract

A financial derivative that represents an agreement to buy or sell an asset at a pre-agreed future point in time at a specified price.