The Chair Company Manufactures Two Modular Types of Chairs; One

question 98

Essay

The Chair Company manufactures two modular types of chairs; one for the residential (home) market, and the other for the office market. Budgeted and actual operating data for the past year are:
The industry volume for residential and office chairs of the type sold by the Chair company had been estimated at 2,400,000. Actual industry volume for the year was 2,200,000 chairs.
Required:
1. Compute the sale-mix variance and the sales- quantity variance by type of chair, and in total.
2. Compute the market-share variance and market-size variances. (Calculate actual and budgeted market share percentages to two decimal places.)

---

Definitions:

Debt-to-Equity Ratio

A measure showing the balance of debt versus shareholders' equity employed in the procurement of company assets.

Financed

The process of providing or securing funds for business activities, purchases, or investments.

Investor and Creditor Risk

The level of uncertainty faced by investors and creditors due to the possibility of a company failing to meet its financial obligations.