Suppose you are the managerial accountant of the brewery. The company just entered the market. However, the management is fully confident about the quality of the products and prices.

Based on the management estimation at the end of 2021, the company should reach a $1 million operational profit. Whilst, now in September the overall operation net profit is $400K, only. The records show that the sale amount is above the budgeted amount by 15%.

Now, this is your obligation to analyse the current circumstances, find out the reasons for this low profit earned, and what should be done in the future to address this challenge.

Please use the different aspects of the sale variances and market variances.