Fairy Flats Ltd. expects to capture 28% of the glitter market. In a typical year, this market

Question:

Fairy Flats Ltd. expects to capture 28% of the glitter market. In a typical year, this market averages 8,000,000 units. This year sales were 7,800,000 units. Fairy Flats sold 1,716,000 units. The standard contribution margin per unit for glitter is $2.40.

Required:

A. Calculate the market share variance.

B. Calculate the market size variance.

C. Write an explanation of the results for management.

D. Make a recommendation to management for the upcoming production period.

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...