Market-share and market-size variances (continuation of 14-32). Aussie Intonautics senior vice president of marketing prepared his budget

Question:

Market-share and market-size variances (continuation of 14-32). Aussie Intonautics’ senior vice president of marketing prepared his budget at the beginning of the third quarter assuming a 25% market share based on total sales. The total handheld-organizer market was estimated by Foolinstead Research to reach sales of 400,000 units worldwide in the third quarter. However, actual sales in the third quarter were 500,000 units.

1. Calculate the market-share and market-size variances for Aussie Infonautics in the third quarter o’ 2010 (calculate all variances in terms of contribution margins).

2. Explain what happened based on the market-share and market-size variances.

3. Calculate the actual market size, in units, that would have led to no market-size variance (again using budgeted contribution margin per unit). Use this market-size figure to calculate the actual market share that would have led to a zero market-share variance.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Cost Accounting A Managerial Emphasis

ISBN: 978-0136126638

13th Edition

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

Question Posted: