question archive How can the sales-quantity variance be decomposed further?

How can the sales-quantity variance be decomposed further?

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How can the sales-quantity variance be decomposed further?

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Answer:

The sales-quantity variance can be decomposed into (a) a market-size variance (which arises when the actual total market size in units is different from the budgeted market size in units), and (b) a market share variance (which arises when the actual market share of a company is different from its budgeted market share). Both variances use the budgeted average contribution margin per unit.