Babar Manufacturing had a high and low level of activity last year: . 180,000 units produced in July + 60,000 units produced in February Machine maintenance costs were $120,000 in July and $48,000 in February Using the high-low method, the estimated total maintenance cost for a month in which 120,000 units will be produced is

Babar Manufacturing had a high and low level of activity last year: . 180,000 units produced in July + 60,000 units produced in February Machine maintenance costs were $120,000 in July and $48,000 in February Using the high-low method, the estimated total maintenance cost for a month in which 120,000 units will be produced is

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 25E: Lowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000...

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Lowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing decided to lower its price to 19 per unit expecting it can increase the units sold by 16%. a. Compute the normal revenue with a 20 selling price. b. Compute the planned revenue with a 19 selling price. c. Compute the actual revenue for November, assuming 135,000 units were sold in November at 19 per unit. d. Compute the revenue price variance, assuming 135,000 units were sold in November at 19 per unit. e. Compute the revenue volume variance, assuming 135,000 units were sold in November at 19 per unit. f. Analyze and interpret the lowering of the price to 19.
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