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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 504000 unit and the standard contribution was $12 per unit.
what is the level of the actual sales?
a) two percentage point up on budgeted at 510080 units
b)three percentage down overall budget at 488880 units
c)three percentage down overall budget at 519120 units
d)up by a little over five and half percentage to 53200 unitshello sir i have not understand this question at all
Leaf’s budgeted market share must have been 18% (20% – 2%).
They budgeted on selling 504,000 units, and since this was budgeted as being 18% of the whole market, the budgeted overall market must have been 504,000 / 18% = 2,800,000 units.
The overall market actually fell by 95%, so the actual overall market must have been 95% x 2,800,000 = 2,660,000.
Leaf’s actual share of the market was 20%, therefore their actual sales must be 20% x 2,660,000 = 532,000 units.
(I assume you are happy with the term ‘market share’ from your earlier studies?)
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