Mkt size and mkt share variance doubt

I am puzzled why you are asking me this - surely if you have the question you also have the Kaplan answer? They must have budgeted on a market share of 18% (20 - 2) and so they were expecting total sales in the market as a whole of 504,000 / 18% = 2,800,000. The market contracted by 5% - so sales in the market as a whole were 2,800,000 x 95% = 2,660,000. Market share was 20%, so their actual sales were 20% x 2,660,000 = 532,000. The variances should now be fairly obvious from the Kaplan answer, but if not then tell me which bit of the answer is giving you a problem and I will try and help.

I have not seen this question before but I am interested to know how you work out these answers. I keep getting confused to what is the market size and what is the share. Thanks

For market size variance: If our share had stayed at 18%, then with the fall in the market sales to 2,660,000 our sales would have been 18% x 2,660,000 = 478,800. We had budgeted on selling 504,000, and so the market size variance is (478,800 - 504,000) x $12. For market share variance: If our share has stayed at 18% we would have sold 478,800 (as above). We actually sold 532,000 (see my previous reply) and so the market share variance is (532,000 - 478,800) x $12

Sir john Really appreciate your reply sir. I actually had a doubt with the actual level of sales. But its a lot clear to me now. Kaplan did have a solution but jus numbers dint make sense to me. Its a lot better with your explanation. Thank you :) u are a star xx

Thank you :-)

I agree that your explanations are very helpful and wanted to say thanks for this!

Thank you :-)

Your explanations are very clear and helpful. Thank you