Leaf limited has a mixed year. It's 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 was the actual level of sales?
A Two percentage points up on budget at 510,080 units
B Three percent down overall on budget at 488,880 units
C. Three percent up on budget at 519,120 units
D. Up by a little over five and half percent to 532,000 units
The correct answer is D, and I can't work out how to get the right answer. Please guide me the assumption on it.
Thanks
Ask the Tutor ACCA PM
Variances
10y ago#1The budgeted market share must have been 20% - 2% = 18%
Therefore the budgeted overall market must have been 504,000 / 18% = 2,800,000
The market reduced by 5% so the actual overall market must have been 95% x 2,800,000 = 2,660,000.
The actual sales were 20% of market and were therefore 20% x 2,660,000 = 532,000.
Thank u sir
10y ago#3You are welcome :-)
Sign in to reply to this topic.