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Gibson Educational Services had budgeted its training service charge at $75 per hour. The company planned to provide 38,000 hours of training services during Year 3. By lowering the service charge to $57 per hour, the company was able to increase the actual number of hours to 39,300. 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 Was the decision profitable? Sales

Gibson Educational Services had budgeted its training service charge at $75 per hour. The company planned to provide 38,000 hours of training services during Year 3. By lowering the service charge to $57 per hour, the company was able to increase the actual number of hours to 39,300. 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 Was the decision profitable? Sales

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 5CE: Saginaw Company is a garden products wholesale firm. In December, Saginaw Company expects to sell...
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Gibson Educational Services had budgeted its training service charge at $75 per hour. The company planned to provide 38,000 hours of training services during Year 3. By lowering the service charge to $57 per hour, the company was able to increase the actual number of hours to 39,300. 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 Was the decision profitable? Sales
Transcribed Image Text:Gibson Educational Services had budgeted its training service charge at $75 per hour. The company planned to provide 38,000 hours of training services during Year 3. By lowering the service charge to $57 per hour, the company was able to increase the actual number of hours to 39,300. 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 Was the decision profitable? Sales
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