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  114,900  $28 
Product S  148,400  20 
Product T  22,700  20 
At the end of the year, actual sales revenue for Product R and Product S was $3,159,000 and $3,081,800, respectively. The actual price charged for Product R was $27 and for Product S was $19. Only $10 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled $599,500 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  $  Unfavorable  $  Favorable 
Product S  $  Unfavorable  $  Favorable 
Product T  $  Unfavorable  $  Favorable 
Answer:
Sales Price Variance  Sales Volume Variance  
Product R  117000 UF  58800 F 
Product S  162200 UF  276000 F 
Product T  599500 UF  37250 F 
Detail working for your easy understanding
Sales Price Variance= (Actual priceBudgeted Price) X Actual Quantity Sold 
Product R= (2728)X 117000=$117000 UF 
Actual Quantity Sold= 3159000/27=117000 Unit 
Product S= (1920)X 162200 =$162200 UF 
Actual Quantity Sold= 3081800/19=162200 Unit 
Product T= (1020)X 59950 =$599500 UF 
Actual Quantity Sold= 599500/10=59950 Unit 
Sales Volume Variance=( Actual Sales Quantity Budgeted Sales Quantity)X Budgeted Price 
Product R= ( 117000114900) X 28=$58800 F 
Product S= ( 162200148400)X20=$276000 F 
Product R= ( 5995022700)X20=$37250 F 
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