Pricing Strategy, Sales Variances
Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc., budgeted sales of the following.
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.
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|
Suppose that Product T is a new product just introduced during the
year. What pricing strategy is Eastman, Inc., following for this
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