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Pricing Strategy, Sales Variances Eastman, Inc., manufactures and sells three products: R, S, and T. In...

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 110,500        $26       
Product S 149,300        23       
Product T 21,200        21       

At the end of the year, actual sales revenue for Product R and Product S was $2,709,600 and $3,590,400, respectively. The actual price charged for Product R was $24 and for Product S was $22. Only $10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled $553,000 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 $ Unfavorable $ Favorable
Product S $ Unfavorable $ Favorable
Product T $ Unfavorable $ Favorable
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Homework Answers

Answer #2
Actual sales volume
Product R 112900 =2709600/24
Product S 163200 =3590400/22
Product T 55300 =553000/10
1
Sales price variance
Product R 225800 Unfavorable =112900*(26-24)
Product S 163200 Unfavorable =163200*(23-22)
Product T 608300 Unfavorable =55300*(21-10)
Sales volume variance
Product R 62400 Favorable =26*(112900-110500)
Product S 319700 Favorable =23*(163200-149300)
Product T 716100 Favorable =21*(55300-21200)
answered by: anonymous
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