Sunset Solar installs solar panels throughout Australia. The accountants estimated the market size to be 2 million
Question:
Sunset Solar installs solar panels throughout Australia. The accountants estimated the market size to be 2 million solar panels with Sunset Solar hoping to achieve 5 per cent market share. The static budget shows that each panel is expected to provide a $2000 contribution margin. At the end of the financial period, the actual sales volume was 90 000 panels. Management were surprised by the low sales volume especially given that analysts had identified that the market size had grown by 2 per cent due to government rebates on solar panel installation.
Required
(a) Calculate the actual market size.
(b) Calculate the actual market share.
(c) Calculate the market size variance.
(d) Calculate the market share variance.
(e) Identify several factors that could have caused the variance identified in (d).
Step by Step Answer:
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey