Market share and market size variances (continuation of 14 32). Aussie Intonautics’ senior vice president of marketing prepared his budget at the beginning of the third quarter assuming a 25% market share based on total sales. The total handheld organizer market was estimated by Foolinstead Research to reach sales of 400,000 units worldwide in the third quarter. However, actual sales in the third quarter were 500,000 units.
1. Calculate the market share and market size variances for Aussie Infonautics in the third quarter o’ 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.
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