Question
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 | 104,800 | $28 |
Product S | 150,000 | 23 |
Product T | 20,900 | 23 |
At the end of the year, actual sales revenue for Product R and Product S was $2,921,400 and $3,601,400, respectively. The actual price charged for Product R was $27 and for Product S was $22. Only $13 was charged for Product T to encourage more consumers to buy it, and actual sales revenue equaled $722,150 for this product.
Required:
1. Calculate the sales price and sales volume variances for each of the three products based on the original budget.
Sales price variance | Sales volume variance | |||
Product R | $ | Unfavorable | $ | Favorable |
Product S | $ | Unfavorable | $ | Favorable |
Product T | $ | Unfavorable | $ | Favorable |
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