EZ Toys’ marketing manager estimated the sales of 12,000 trucks in October for the Trucks Division based on an estimated industry volume of 80,000 trucks and on the Trucks Division’s ability to maintain a market share of 15 percent in the past. That is,

80,000 trucks to be sold in the market × 15% of estimated market share = 12,000 trucks.

Due to unexpected shift in demand, the industry volume in toy truck sales dropped to 62,500 units in October while EZ Toys’ Trucks Division managed to sell a total of 10,000 units.

The following information is also available.

Budget Data
Unit selling price	$14
Unit variable cost:
Direct materials	$  5
Direct labor	4
Variable overhead	2
Total unit variable costs	$11

Required:

Prepare October’s industry volume and market share activity variances for the Trucks Division of EZ Toys.

Answer rating: 100% (QA)

1 Industry volume variance Standard contribution margin per unit Actual industry volume Budgeted ind... View the full answer