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Hi Sir,
Could you please advise the following question:
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 504,000 units and standard contribution was $12 per unit.
What is the level of actual sales?
@kwokahmen said:
Hi Sir,Could you please advise the following question:
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 504,000 units and standard contribution was $12 per unit.
What is the level of actual sales?
It’s a question from Kaplan Revision Kit Q 142
I do not have the Kaplan Kit (only the BPP Kit) although I am surprised that Kaplan does show the answer and workings 🙂
They budgeted on selling 504,000 units and thought that their market share would be 18% (20% – 2%) and therefore they expected the market as a whole to sell 504,000 / 18% = 2,800,000 units.
However the overall market sales fell by 5%, so the actual market sales were 95% x 2,800,000 = 2,660,000 units.
Their actual market share was 20% and so their actual sales were 20% x 2,660,000 = 532,000.
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