Sheridan Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of2,500 kits was prepared for the year. Fixed operating expenses account for 74% of total operating expenses at this level of sales.Sales$ 500,000Cost of goods sold (all variable)105,600Gross margin394,400Operating expenses32,200Operating income$ 362,200Assume that during the year Sheridan Sports actually sold 2,700 volleyball kits during the year at a price of $ 202 per kit.Calculate the sales price variance. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.)2FavorableSales price variance%24

Formula: Sales price variance = ( Actual Sales price - Standard sales price ) x Actual quantity…

Answered: Sheridan Sports sells volleyball kits…

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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empo Company's fixed budget (based on sales of 16,000 units) for the first quarter reveals the following. Fixed Budget Sales (16,000 units × $202 per unit) $ 3,232,000 Cost of goods sold Direct materials $ 400,000 Direct labor 704,000 Production supplies 416,000 Plant manager salary 200,000 1,720,000 Gross profit 1,512,000 Selling expenses Sales commissions 128,000 Packaging 240,000 Advertising 100,000 468,000 Administrative expenses Administrative salaries 250,000 Depreciation—office equip. 220,000 Insurance 190,000 Office rent 200,000 860,000 Income from operations $ 184,000 1.Compute the total variable cost per unit. 2. Compute the total fixed costs. 3.Compute the income from operations for sales volume of…
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