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Hi Sir,
I don’t seem to understand the market size and share variances in section C part B.
So the market share was std volume – revised volume @std contribution for nurses. I don’t understand where the contribution figures are coming from??
They have done budgeted units so 4200*80%? But would that not be in units? And not in contribution? Because Q1 nurses was £14m/£1000 per nurse= 14000 in volume then*30%= 4200 in units
With revised it’s revised sales volume of 5670*80% but they haven’t used std contribution for it?
Thanks you so much in advance sir.
4,200 is not the budgeted units. It is the budgeted revenue. The national market for nurses was $14M and they held 30% share, so 30% x $14M = $4.2M (again this is revenue and not units).
The standard contribution margin (per the question) is 80%, and the contribution margin is the contribution as a % of the revenue. So the budgeted standard contribution was 80% x $4.2M = $3,360.
Hi Sir,
for this question, could you please clarify in part c how the amounts of 13,230 and 2,870 been calculated?
many thanks in advance
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