Exercise 15-11A (Algo) Evaluating a decision to increase sales volume by lowering sales price LO 15-3, 15-4, 15-5 Baird Educational Services had budgeted its training service charge at $73 per hour. The company planned to provide 31,000 hours of training services during the year. By lowering the service charge to $66 per hour, the company was able to increase the actual number of hours to 32,800. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (L.e., zero variance).) b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). (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 Was the decision profitable? Variance
Exercise 15-11A (Algo) Evaluating a decision to increase sales volume by lowering sales price LO 15-3, 15-4, 15-5 Baird Educational Services had budgeted its training service charge at $73 per hour. The company planned to provide 31,000 hours of training services during the year. By lowering the service charge to $66 per hour, the company was able to increase the actual number of hours to 32,800. Required a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (L.e., zero variance).) b. Determine the flexible budget variance, and indicate whether it is favorable (F) or unfavorable (U). (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 Was the decision profitable? Variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 15-11A (Algo) Evaluating a decision to increase sales volume by lowering sales price LO 15-3,
15-4, 15-5
Baird Educational Services had budgeted its training service charge at $73 per hour. The company planned to provide 31,000 hours of
training services during the year. By lowering the service charge to $66 per hour, the company was able to increase the actual number
of hours to 32,800.
Required
a. Determine the sales volume variance, and indicate whether it is favorable (F) or unfavorable (U). (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). (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
c. Was the decision profitable?
Variance
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