Revenue variances Lowell Manufacturing Inc. has a normal selling price of $20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing decided to lower its price to $19 per unit expecting it can increase the units sold by 16%. a. Compute the normal revenue with a $20 selling price. b. Compute the planned revenue with a $19 selling price. c. Compute the actual revenue for November, assuming 135,000 units were sold in November at $19 per unit.
Revenue variances Lowell Manufacturing Inc. has a normal selling price of $20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing decided to lower its price to $19 per unit expecting it can increase the units sold by 16%. a. Compute the normal revenue with a $20 selling price. b. Compute the planned revenue with a $19 selling price. c. Compute the actual revenue for November, assuming 135,000 units were sold in November at $19 per unit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Revenue variances
Lowell Manufacturing Inc. has a normal selling price of $20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing
decided to lower its price to $19 per unit expecting it can increase the units sold by 16%.
a. Compute the normal revenue with a $20 selling price.
b. Compute the planned revenue with a $19 selling price.
c. Compute the actual revenue for November, assuming 135,000 units were sold in November at $19 per unit.
d. Compute the revenue price variance, assuming 135,000 units were sold in November at $19 per unit.
e. Compute the revenue volume variance, assuming 135,000 units were sold in November at $19 per unit.
f. Analyze and interpret the lowering of the price to $19.
Decreasing the selling price to $19 did
total revenue, but it did not
the revenues by 16% as planned.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F66d28778-b88a-4da4-ae2a-8d8939a4606c%2F0b39296b-dbf4-4c36-a7f0-047a476a02fb%2F3dae43_processed.png&w=3840&q=75)
Transcribed Image Text:Revenue variances
Lowell Manufacturing Inc. has a normal selling price of $20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing
decided to lower its price to $19 per unit expecting it can increase the units sold by 16%.
a. Compute the normal revenue with a $20 selling price.
b. Compute the planned revenue with a $19 selling price.
c. Compute the actual revenue for November, assuming 135,000 units were sold in November at $19 per unit.
d. Compute the revenue price variance, assuming 135,000 units were sold in November at $19 per unit.
e. Compute the revenue volume variance, assuming 135,000 units were sold in November at $19 per unit.
f. Analyze and interpret the lowering of the price to $19.
Decreasing the selling price to $19 did
total revenue, but it did not
the revenues by 16% as planned.
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