8 Market-share and market-size variances (continuation of 16-27). Aussie Infonautics’ © ©
senior vice president of marketing prepared his budget at the beginning of the third quarter 1. Budgeted average assuming a 25% market share based on total sales. The total handheld-organizer market was _ contribution margin estimated by Foolinstead Research to reach sales of 400,000 units worldwide in the third _ peru nit,$ 130.75 quarter. However, actual sales in the third quarter were 500,000 units.
REQUIRED 1. Calculate the market-share and market-size variances for Aussie Infonautics in the third quarter of 2010 (calculate all variances in terms of contribution margins).
2. Explain what happened based on the market-share and market-size variances.
3. Calculate the actual market size, in units, that would have led to no market-size variance (again using budgeted contribution margin per unit). Use this market-size figure to calculate the actual market share that would have led to a zero market-share variance.LO1