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I didn’t quite understand the solution given in the rev kit for this question .Pls tell me how to find the answer
Leaf Ltd has had a mixed year.Its market share has improved 2% points to 20% but the overall market had contracted by 5% in the same period. The budgeted sales were 504000 units and the std contribution was $12 per unit
What is the level of actual sales ?
A. Two percentage points up on budget at 510080 units
B. 3% down overall on budget at 488880 units
C. 3% up on budget at 519120 units
D. Up by a little over five and a half percent to 532000 unitsWhen they prepared the budget, they must have expected to have an 18% (20 – 2) share of the market. Therefore they expected the market overall to be for 504,000/18% = 2,800,000 units.
The market contracted by 5%, so the actual total market was 95% x 2,800,000 = 2,660,000 units.
Their actual share of the market was 20%, and so their actual sales must be 20% x 2,660,000 = 532,000 units.
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