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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 Budgeted Volume Price $24 23 23 Product R Product S Product T At the end of the year, actual sales revenue for Product R and Product S was $2,499,200 and $3,288,600, respectively. The actual price charged for Product R was $22 and for Product S was $21. Only $13 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled $696,150 for this product Required: 1. Calculate the sales price and sales volume variances for each of the three products based on the original budget 111,200 144,500 20,100 Sales price variance Unfavorable Unfavorable Unfavorable Sales volume variance Product R Product S Product T Favorable Favorable Favorable 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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