Davidson Corp. produces a single product: fireproof safety deposit boxes for home use. The budgetgoing into the current year anticipated a selling price of $55 per unit. Because of competitive pressures, the company had to cut selling prices by 10% during the year. Budgeted variable costs per unitare $32, and budgeted total fixed costs are $156,000 for the year. Anticipated sales volume for theyear was 10,000 units. Actual sales volume was 5% less than budget. (1) What was the sales pricevariance for the year? (Round your answer to the nearest whole dollar.) (2) Label this variance F(favorable) or U (unfavorable), as appropriate
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
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 $55 per unit. Because of competitive pressures, the company had to cut selling prices by 10% during the year. Budgeted variable costs per unit
are $32, and budgeted total fixed costs are $156,000 for the year. Anticipated sales volume for the
year was 10,000 units. Actual sales volume was 5% less than budget. (1) What was the sales price
variance for the year? (Round your answer to the nearest whole dollar.) (2) Label this variance F
(favorable) or U (unfavorable), as appropriate
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