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Hi Sir,
Please Solve and Explain the following ProblemLeaf limited has had a mixed year. Its market share has improved two percentage points to 20% but the overall market had contracted by 5% in the same period. The budgeted sales were 504,000 units and standard contribution was $12 per unit.
What is the level of actual sales?A Two percentage points up on budget at 510,080 units
B Three percent down overall on budget at 488,880 units
C Three percent up on budget at 519,120 units
D Up by a little over five and a half percent to 532,000 unitsalso solve these please
Leaf Limited has had a mixed year. Its market share has improved two percentage points to 20% but the overall market had contracted by 5% in the same period. The budgeted sales were 504,000 units and standard contribution was $12 per unit.
The sales market size variance is:A $1,680,000 Fav
B $1,680,000 Adv
C $302,400 Adv
D $302,400 Fav———————————————————————————————————————-
Leaf Limited has had a mixed year. Its market share has improved two percentage points to 20% but the overall market had contracted by 5% in the same period. The budgeted sales were 504,000 units and standard contribution was $12 per unit.
The sales market share variance is:A $638,400 Adv
B $638,400 Fav
C $336,000 Adv
D $336,000 Favi was very confident that i will attempt variances Question in paper very well but seeing these MCQs, it seem to be tough to cross even average….
We are not here to solve questions for you.
You must have an answer in the same book in which you found the questions (if not then you should be using a different book).
You should use this forum to ask about things in the answers that you do not understand.
I will answer the first one, but not the other two!
The budget sales were 504,000 and the market share was 18% (20% – 2%). Therefore they were expecting the market sales to be 504,000/18% = 2,800,000.
The market contracted by 5%, and so the actual market sales were 95% x 2,800,000 = 2,660,000.
The actual market share was 20%, and so Leaf’s sales were 20% x 2,660,000 = 532,000
(which is a little over 5.5% on the original budget)
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