Market Share and Market Size Variances. Rhaden Company produces sweat resistant headbands for joggers. Information pertaining to Rhaden’s operations for May 2011 follows:
|
Actual |
Budget |
|
|
Units sold |
230,550 |
220,000 |
|
Sales revenue |
$3,412,140 |
$3,300,000 |
|
Variable cost ratio |
68% |
64% |
|
Market size in units |
4,350,000 |
4,400,000 |
1. Compute the sales volume variance for May 2011.
2. Compute the market share and market size variances for May 2011.
3. Comment on possible reasons for the variances you computed.