Austen Educational Services had budgeted its training service charge at $100 per hour. The company planned to provide 30,000 hours of training services during 2015. By lowering the service charge to $95 per hour, the company was able to increase the actual number of hours to 31,500.
a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U).
b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U).
c. Did lowering the price of training services increase revenue? Explain.