Question
Lee Lighting produces two models of floor lamps: Standard and Smart. The two differ primarily in the quality of the materials and the additional electronics
Lee Lighting produces two models of floor lamps: Standard and Smart. The two differ primarily in the quality of the materials and the additional electronics required for the Smart lamp. At budget, Standard sells for $24 per unit and has a variable cost to produce of $15. The Smart lamp sells for a budgeted $67 per lamp and has a budgeted variable cost to produce of $49. Lee expects to sell 40 percent Smart lamps, and budgeted sales at a total of 98,060 lamps of both models for May. Lee actually sold 94,060 lamps, of which 39,560 were Smart lamps. Smart lamp actual revenues represented 40 percent of May total actual revenue.
Required: a. Compute the sales activity variance for Lee for May. b. Compute the sales mix and sales quantity variances for May.
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