Market share variance
A market share variance compares actual sales with the quantity expected if budget market share had been achieved in the actual total market. Value the difference at standard contribution or profit on the required basis. It complements the market size effect and helps separate a changed market from the firm’s relative result. Product availability, competitor action and strategy can affect interpretation; a reduced share is not automatically caused by sales staff.
Worked example
Actual market is 120,000 units and budget share 10%, giving revised sales 12,000. Actual sales 11,000 at standard $4 contribution give a $4,000 adverse share effect.
Common mistake
Compare with the revised opportunity in the actual market, not merely the original budgeted sales quantity.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | PM | Direct | September 2026–June 2027 |