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. Anticipated sales volume for the year was 13,000 units. Actual sales volume was 5% less than budget. QUESTIONS: (1) What was the sales price variance for the year? (2) Label this variance F (favorable) or U (unfavorable), as appropriate.
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. Anticipated sales volume for the year was 13,000 units. Actual sales volume was 5% less than budget. QUESTIONS: (1) What was the sales price variance for the year? (2) Label this variance F (favorable) or U (unfavorable), as appropriate.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Please do not give solution in image format and show calculation thanku
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.
Anticipated sales volume for the year
was 13,000 units. Actual sales volume
was 5% less than budget.
QUESTIONS:
(1) What was the sales price variance
for the year?
(2) Label this variance F (favorable) or
U (unfavorable), as appropriate.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education