Question:
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.