Pricing Strategy, Sales Variances
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following.
Budgeted Volume 
Budgeted Price 


Product R  113,200  $27 
Product S  154,500  22 
Product T  21,500  21 
At the end of the year, actual sales revenue for Product R and Product S was $3,018,600 and $3,314,000, respectively. The actual price charged for Product R was $26 and for Product S was $20. Only $10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled $558,500 for this product.
Required:
1. Calculate the sales price and sales volume variances for each of the three products based on the original budget.
Sales price variance  Sales volume variance  
Product R  $  $  
Product S  $  $  
Product T  $  $ 
2.
Suppose that Product T is a new product just introduced during the
year. What pricing strategy is Eastman, Inc., following for this
product?
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