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Eastman, Inc., manufactures and sells three products: R,S, and T. In January, Eastman, Inc., budgeted sales of the following. Budgeted Budgeted Volume Price Product R
Eastman, Inc., manufactures and sells three products: R,S, and T. In January, Eastman, Inc., budgeted sales of the following. Budgeted Budgeted Volume Price Product R Product S Product T 108,000 141,300 21,200 $27 23 20 At the end of the year, actual sales revenue for Product R and Product S was2,862,600 and 3,370,400, respectively. The actual price charged for Product R was $26 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 $554,000 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 110,100 Unfavorable v Favorable Favorable Favorable Product S 153,200Unfavorable Product T Unfavorable V 2. Suppose that Product T is a new product just introduced during the year. What pricing strategy is Eastman, Inc., following for this product? Penetration pricing strategy Foodback Chack My Wark within the parentheses of the formula: actual you will find volume within the parentheses of the formula: actual volume versus expected volume. 2. Is it penetration pricing, price skimming or price gouging
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