Byers, Inc., manufactures and sells three products: K, M, and P. In January, Byers, Inc., budgeted sales
Question:
At the end of the year, actual sales for Product K and Product M were $5,600,000 and $3,270,000, respectively. The actual price charged for each was equal to the budgeted price. Product P, however, had revenues of $600,000. While total revenue was higher than expected, the actual price of $10 represented a last-minute revision from budget to increase consumer acceptance of the product.
Required:
1. Calculate the sales price and price volume variances for each of the three products based on the original budget.
2. Suppose that Product P is a new product just introduced during the year. What pricing strategy is Byers, Inc., following for thisproduct?
Step by Step Answer:
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan