Kessla Taub manages the marketing department at Electronic Village. Company management has been concerned about the sales of three products and has informed Taub that, regardless of other sales, her performance for the year will be evaluated on whether she has met the sales budget for the following items: Sales Price per Unit Budgeted Unit Sales Wireless backup camera $120 2,560 Heated seat cushion 68 3,360 Wireless car phone charger 60 1,680 Actual sales for these three products, generated for the year, were as follows: Sales Price per Unit Sales Revenue Wireless backup camera $115 $312,800 Heated seat cushion 70 226,240 Wireless car phone charger 55 365,200 a. Compute the sales price variances by product. Note: Do not use negative signs with your answers. Sales price variance Wireless backup camera: Answer Answer Heated seat cusion: Answer Answer Wireless car phone charger: Answer Answer Total Answer Answer b. Compute the sales volume variances by product. Note: Do not use negative signs with your answers. Sales volume variance Wireless backup camera: Answer Answer Heated seat cusion: Answer Answer Wireless car phone charger: Answer Answer Total Answer Answer
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Revenue variances
Kessla Taub manages the marketing department at Electronic Village. Company management has been concerned about the sales of three products and has informed Taub that, regardless of other sales, her performance for the year will be evaluated on whether she has met the sales budget for the following items:
| Sales Price per Unit | Budgeted Unit Sales | |
|---|---|---|
| Wireless backup camera | $120 | 2,560 |
| Heated seat cushion | 68 | 3,360 |
| Wireless car phone charger | 60 | 1,680 |
Actual sales for these three products, generated for the year, were as follows:
| Sales Price per Unit | Sales Revenue | |
|---|---|---|
| Wireless backup camera | $115 | $312,800 |
| Heated seat cushion | 70 | 226,240 |
| Wireless car phone charger | 55 | 365,200 |
a. Compute the sales price variances by product.
Note: Do not use negative signs with your answers.
| Sales price variance | ||
|---|---|---|
| Wireless backup camera: | Answer | Answer |
| Heated seat cusion: | Answer | Answer |
| Wireless car phone charger: | Answer | Answer |
| Total | Answer | Answer |
b. Compute the sales volume variances by product.
Note: Do not use negative signs with your answers.
| Sales volume variance | ||
|---|---|---|
| Wireless backup camera: | Answer | Answer |
| Heated seat cusion: | Answer | Answer |
| Wireless car phone charger: | Answer | Answer |
| Total | Answer | Answer |
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