Question
4. Butterfly Kitchens Inc. (BKI) makes herbal remedies for many common illnesses. The remedies are available in kits that sell for $34 each. BKI projected
4. Butterfly Kitchens Inc. (BKI) makes herbal remedies for many common illnesses. The remedies are available in kits that sell for $34 each. BKI projected sales of 75,000 kits in its first year. Budgeted variable costs per kit were $12.25.
In its first year, BKI sold 63,250 kits at a price of $36 each.
BKIs projections for the first year were based on an expected 12% of the total herbal remedy market (expected total market size of 625,000 kits). Actual results at the end of the first year were 11.5% of the total herbal remedy market (actual total market size of 550,000 kits).
Required:
- Calculate the sales price and sales volume variances for BKIs first year. (5 marks)
- Calculate the market share and market size variances for BKIs first year. (5 marks)
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