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Adams Educational Services had budgeted its training service charge at $80 per hour. The company planned to provide 34,000 hours of training services during Year 3. By lowering the service charge to $68 per hour, the company was able to increase the actual number of hours to 35,300. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). c. Did lowering the price of training services increase revenue?

Adams Educational Services had budgeted its training service charge at $80 per hour. The company planned to provide 34,000 hours of training services during Year 3. By lowering the service charge to $68 per hour, the company was able to increase the actual number of hours to 35,300. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). c. Did lowering the price of training services increase revenue?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Adams Educational Services had budgeted its training service charge at $80 per hour. The company planned to provide 34,000 hours of training services during Year 3. By lowering the service charge to $68 per hour, the company was able to increase the actual number of hours to 35,300. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). c. Did lowering the price of training services increase revenue? a. Volume variance b. Flexible budget variance Sales $ 99,600 F $ 363,000 U c. Was the decision profitable? No
Transcribed Image Text:Adams Educational Services had budgeted its training service charge at $80 per hour. The company planned to provide 34,000 hours of training services during Year 3. By lowering the service charge to $68 per hour, the company was able to increase the actual number of hours to 35,300. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). c. Did lowering the price of training services increase revenue? a. Volume variance b. Flexible budget variance Sales $ 99,600 F $ 363,000 U c. Was the decision profitable? No
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