Question

The following information about Morgantown Avionics’ two Altimeter models is provided: Budgeted Actual Standard model sales...

The following information about Morgantown Avionics’ two Altimeter models is provided:

Budgeted

Actual

Standard model sales in units

300

500

Customized model sales in units

100

150

Total contribution margin

$1,700,000

Budgeted average unit contribution margin

$4,250

Budgeted unit sales for the entire Motorcycle Choppers industry were 4,000 of all model types and actual unit sales for the industry were 4,600.

Calculate:

  1. Market share variance




  1. Market size variance

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Homework Answers

Answer #1
1 Market share variance $807,415 Favorable
[(Actual market share percentage – Budgeted market share percentage)Actual industry sales in units] Budgeted average unit contribution margin
[(14.13% - 10.00%) x 4,600] x $4,250
Actual market share percentage 14.13%
(650 / 4,600)
Budgeted market share percentage 10.00%
(400/4,000)
2 Market size variance $1,105,000 Favorable
[(Actual industry sales in units – Budgeted industry sales in units) Budgeted market share percentage] Budgeted average unit contribution margin
[(4,600 - 4,000) x 10.00%] x $4,250
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