Reiser Company is a pet food wholesale firm. In December, Reiser Company expects to sell 20,000 bags of pet food at an average price of $2.20 per bag. Actual results are 18,500 bags sold at an average price of $2.25 per bag.

Required:

1. Calculate the sales price variance for December.

2. Calculate the price volume variance for December.

3. Calculate the overall sales variance for December. Explain why it is favorable or unfavorable.

4. What if December sales were actually 22,000 bags? How would that affect the sales price variance? The price volume variance? The overall sales variance?

LO1