80.2K

Verified Solution

Link Copied!

Tables2You is a table manufacturing company based in County Antrim. The company uses a standard variable costing system and serves both the UK and export markets. They make two types of tables, Table 1 and Table 2. Each table has a separate manufacturing facility, but a central sales department promotes and distributes the tables. The sales department has authority to change selling prices and promote products more heavily than originally planned, if appropriate. A summary of the budgeted and actual results for last month are as below:

Budget
	Table 1	Table 2	Total
Sales volume (units)	10,395	8,505	18,900
Sales ()	254,677	272,160	526,837
Materials ()	93,555	80,798	174,353
Labour ()	66,528	96,957	163,485
Fixed overheads ()	46,200	51,100	97,300
Total costs ()	206,283	228,855	435,138
Profit ()	48,394	43,305	91,699

Actual
	Table 1	Table 2	Total
Sales volume (units)	13,720	5,880	19,600
Sales ()	356,720	179,340	536,060
Materials ()	150,225	50,872	201,097
Labour ()	95,550	70,000	165,550
Fixed overheads ()	45,500	45,150	90,650
Total costs ()	291,275	166,022	457,297
Profit ()	65,445	13,318	78,763

The sales manager has noted that customers regard Table 1 and Table 2 as alternative products, and the two compete with each other to some degree. At the time of preparation of the budget above, it was assumed that the total market for both tables would be 34,000 tables. However, the actual size of the market was 37,000

What is the market size variance?

Answer & Explanation Solved by verified expert

See Answer