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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
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 111,700 $26 Products 151,500 21 Product T 23,300 22 At the end of the year, actual sales revenue for Product Rand Products was 52,755,200 and $3.136.900, respectively. The actual price charged for Product R was $24 and for Products was $19. Only $11 was charged for Product T to encourage more consumers to buy it and actual sales revenue equaled $674,850 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 Unfavorable Favorable Unfavorable Pavorable Product T Unfavorable v Favorable Products 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
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