Revenue variances

Lowell Manufacturing Inc. has a normal selling price of $$20$ per unit and has been selling $125,000$ units per month. In November, Lowell Manufacturing decided to lower its price to $$19$ per unit expecting it can increase the units sold by $16\%.$

a$.$ Compute the normal revenue with a $$20$ selling price.

fill in the blank $1$ of $1$$

b$.$ Compute the planned revenue with a $$19$ selling price.

fill in the blank $1$ of $1$$

c$.$ Compute the actual revenue for November, assuming $135,000$ units were sold in November at $$19$ per unit.

fill in the blank $1$ of $1$$

d$.$ Compute the revenue price variance, assuming $135,000$ units were sold in November at $$19$ per unit.

fill in the blank $1$ of $1$$

e$.$ Compute the revenue volume variance, assuming $135,000$ units were sold in November at $$19$ per unit.

fill in the blank $1$ of $2$$

fill in the blank $2$ of $2$

Unfavorable

f$.$ Analyze and interpret the lowering of the price to $$19.$

Decreasing the selling price to $$19$ did fill in the blank $1$ of $2$

increase

total revenue, but it did not fill in the blank $2$ of $2$

increase

the revenues by $16\%$ as planned.