Page 6 - MAC4861_2 Unisa Test 4 slides - additional
P. 6

STANDARD COSTING


            Market share variance



            • A market share variance can tell you how an increase or


                decrease in your company's market share can affect

                your profitability.


                           Market share variance = (Actual market share –


                           Budgeted market share) x Total units x Profit

                           margin per unit


            • To illustrate this point, consider the same company we


                discussed in the market size variance example. We

                know that the market for the company's product has

                grown to 120,000 units. However, let's say that the

                company's market share has fallen from 20% to 18%.











                                                                                                                                        6
   1   2   3   4   5   6   7