Planning and operational variance

The budgeted sales were 504,000, and then the budget was prepared they were expecting this to be 18% (20 - 2) of the expected total sales of the whole market. So the sales of the whole market must have been expected to be 504,000 / 18% = 2,800,000. However the market contracted by 5% and so the actual sales of the whole market were only 95% x 2,800,000 = 2,660,000. Also, Leaf's market share was actually 20% and so their actual sales must have been 20% x 2,660,000 = 532,000 units. The rest of the solution in your Exam Kit will hopefully now make sense :-)

You are welcome :-)