Berlin Corp. buys and sells two types of sunglasses in Berlin: ABC and DEF. Budgeted and actual results are as follows -> see picture Berlin corp. prepared the budget for 2017 assuming 12% of market share based on total sales of 1,900,000 units in Berlin. However, actual sales volume in Berlin was 2,400,000 units. Calculate the market-share and market-size variances for Berlin corp. in 2017. Calculate all variances in terms of contribution margin. Comment on the results.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Berlin Corp. buys and sells two types of sunglasses in Berlin: ABC and DEF. Budgeted and actual results are as follows -> see picture
Berlin corp. prepared the budget for 2017 assuming 12% of market share based on total sales of 1,900,000 units in Berlin. However, actual sales volume in Berlin was 2,400,000 units.
Calculate the market-share and market-size variances for Berlin corp. in 2017. Calculate all variances in terms of contribution margin. Comment on the results.
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