Davidson Corp. produces a single product: fireproof safety deposit boxes for home use. The budget going into the current year anticipated a selling price of $61 per unit. Because of competitive pressures, the company had to cut selling prices by 10% during the year. Budgeted variable costs per unit are $38, and budgeted total fixed costs are $159,000 for the year. The anticipated sales volume for the year was 13,000 units. Actual sales volume was 5% less than budget. What was the sales price variance for the year?

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
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Accounting. Devidaon corp. Produces a single product:

Davidson Corp. produces a single product: fireproof safety
deposit boxes for home use. The budget going into the
current year anticipated a selling price of $61 per unit.
Because of competitive pressures, the company had to cut
selling prices by 10% during the year. Budgeted variable
costs per unit are $38, and budgeted total fixed costs are
$159,000 for the year. The anticipated sales volume for the
year was 13,000 units. Actual sales volume was 5% less
than budget.
What was the sales price variance for the year?
Transcribed Image Text:Davidson Corp. produces a single product: fireproof safety deposit boxes for home use. The budget going into the current year anticipated a selling price of $61 per unit. Because of competitive pressures, the company had to cut selling prices by 10% during the year. Budgeted variable costs per unit are $38, and budgeted total fixed costs are $159,000 for the year. The anticipated sales volume for the year was 13,000 units. Actual sales volume was 5% less than budget. What was the sales price variance for the year?
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