External factors A profit centre manager claims that the poor performance of her division is entirely due to factors outside her control. She has submitted the following table along with notes from a market expert, which she believes explains the cause of the poor performance:

After adjusting for the external factors outside the manager’s control, in which category/categories is there evidence of poor performance?

(a) Material cost only

(b) Sales volume and sales price

(c) Sales price and material cost

(d) Sales price only

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Budget Actual Actual Market expert Category this year this year last year notes Sales 500 300 400 The entire volume (units) Sales revenue market has decreased by 25% compared to last year. The product will be obsolete in four years. $50,000 $28,500 $40,000 Rivalry in the market saw selling prices fall by 10%. Total $10,000 $6,500 $8,000 As demand material cost for the raw materials is decreasing, suppliers lowered their prices by 5%.