Geysers Unlimited expects to capture 55% of the flavoured water market. In a typical year, this market

Question:

Geysers Unlimited expects to capture 55% of the flavoured water market. In a typical year, this market averages 2,500,000 units. This year sales reached an all-time high of 2,800,000 units. Geysers Unlimited sold 1,820,000 units. The standard contribution margin per unit for flavoured water is $1.25.

Required:

A. Calculate the market share variance.

B. Calculate the market size variance.

C. Write a memo explaining the results to management.

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...