QUESTION 3 Partially correct 3.30 points out of 6.60 P Flag question Sales Varia

Question

QUESTION 3 Partially correct 3.30 points out of 6.60 P Flag question Sales Variances Assume that Casio Computer Company, LTD. sells handheld communication devices for $150 during August as a back-to-school special. The normal selling price is $225. The standard variable cost for each device is $95. Sales for to the slowdown in the eco only 375,000. Compute the revenue, sales price, sales volume, and net sales volume variances. Revenue variance 31,375,000U Sales price variance Sales volume variance3,750,000xU Net sales volume variance 2,000,000xU 18,750,000U Check

Explanation / Answer

Solution:

Revenue Variance = (400,000 x $225) - (375,000 x $150) = $33,750,000 U

Sales price variance = ($225 - $150) x 375,000 = $28,125,000 U

Sales volume variance = (400,000 - 375,000) x $225 = $5,625,000 U

Net Sales Volume variance = ($225 - $95) x (400,000 - 375,000) = $3,250,000 U

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