Bear Mountain Sled Company manufactures childrens snow sleds. The companys performance report for December is as follows.

Bear Mountain Sled Company manufactures children’s snow sleds. The company’s performance report for December is as follows.

The company uses sales variance analysis to explain the difference between budgeted and actual sales revenue.

Required:
Compute the following variances and indicate whether each is favorable or unfavorable.
1. December sales-price variance.
2. December sales-volume variance.
(CMA,adapted)

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Budget 9,000 Actual Sleds sold Sales Variable casts.. Contribution margin Fixed costs Operating income 7,500 .... $360,000 225,000$450,00 270,000 $180,000 120,000 $60,000 $135,000 126,000 S9,000