PMplanning and operational variance

(b) Based on Budgeted Sales of 250,000 units, we can say that company has a market share of 25%, i.e of the total demand of 1 million units in the market, 25% demand is fulfilled by the company. The overall market has grown by 10%, but the company's share of the market remained same, meaning company's demand is still 25% of the new total demand. Hence, Revised Standard Sales = 1,100,000*25% = 275,000 units Market Size Variance = (250,000 - 275,000)*$4 = $100,000 Favorable Market Share Variance = (275,000 - 220,000)*$4 = $220,000 Adverse Note: Sales Volume Planning Variance is also called Market Size Variance, Sales Volume Operational Variance is also called Market Share Variance.