question archive How can the sales-quantity variance be decomposed further?
Subject:MarketingPrice:2.87 Bought7
How can the sales-quantity variance be decomposed further?
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.