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Required: a. Compute the sales activity variance for Lee for May. b. Compute the sales mix and sales quantity variances for May.

Required: a. Compute the sales activity variance for Lee for May. b. Compute the sales mix and sales quantity variances for May.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lee Lighting produces two models of floor lamps: Standard and Smart. The two differ primarily in the quality of the materials and the additional electronics required for the Smart lamp. At budget, Standard sells for $18 per unit and has a variable cost to produce of $12. The Smart lamp sells for a budgeted $65 per lamp and has a budgeted variable cost to produce of $47. Lee expects to sell 40 percent Smart lamps, and budgeted sales at a total of 98,320 lamps of both models for May. Lee actually sold 94,320 lamps, of which 39,820 were Smart lamps. Smart lamp actual revenues represented 40 percent of May total actual revenue. Required: a. Compute the sales activity variance for Lee for May. b. Compute the sales mix and sales quantity variances for May. Complete this question by entering your answers in the tabs below. Required A Required B Compute the sales activity variance for Lee for May. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Activity variance < Required A Required B >
Transcribed Image Text:Lee Lighting produces two models of floor lamps: Standard and Smart. The two differ primarily in the quality of the materials and the additional electronics required for the Smart lamp. At budget, Standard sells for $18 per unit and has a variable cost to produce of $12. The Smart lamp sells for a budgeted $65 per lamp and has a budgeted variable cost to produce of $47. Lee expects to sell 40 percent Smart lamps, and budgeted sales at a total of 98,320 lamps of both models for May. Lee actually sold 94,320 lamps, of which 39,820 were Smart lamps. Smart lamp actual revenues represented 40 percent of May total actual revenue. Required: a. Compute the sales activity variance for Lee for May. b. Compute the sales mix and sales quantity variances for May. Complete this question by entering your answers in the tabs below. Required A Required B Compute the sales activity variance for Lee for May. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Activity variance < Required A Required B >
Required A Required B Compute the sales mix and sales quantity variances for May. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Mix variance Quantity variance < Required A Required B
Transcribed Image Text:Required A Required B Compute the sales mix and sales quantity variances for May. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Mix variance Quantity variance < Required A Required B
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