Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 23, Problem 24E
Rosenberry Company computed the following revenue variances for January:
Revenue price variance $(350,000) Favorable
Revenue volume variance 50,000 Unfavorable
Assuming that the planned selling price per unit was $10 and that actual sales were 175,000 units, determine the following:
a. Actual selling price of January.
b. Planned number of units that were to be sold in January.
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Revenue variances
Rosenberry Company computed the following revenue
variances for January:
Revenue price variance
Revenue volume variance
$(350,000) Favorable
50,000 Unfavorable
Assuming that the planned selling price per unit was $10
and that actual sales were 175,000 units, determine the
following:
a. Actual selling price of January.
units
b. Planned number of units that were to be sold in January.
Dickinsen Company gathered the following data for December:
Planned
Actual
Sales price per unit
Number of units of sales
$5.80
x 820,000
$4,756,000
$6.00
x 805,000
$4,830,000
Total sales
a. Compute the revenue price variance.
b. Compute the revenue volume variance.
c. Compute the total revenue variance.
Revenue variances
Rockport Industries Inc. gathered the following data for
March:
Sales price per unit
Number of units of sales
Total sales
Planned
$150
x 12,500
Actual
$144
x 12,900
$1,875,000 $1,857,600
Enter a favorable variance as a negative number using a
minus sign and an unfavorable variance as a positive
number.
a. Compute the revenue price variance.
b. Compute the revenue volume variance.
$
c. Compute the total revenue variance.
Chapter 23 Solutions
Financial And Managerial Accounting
Ch. 23 - What are the basic objectives in the use of...Ch. 23 - What is meant by reporting by the principle of...Ch. 23 - Prob. 3DQCh. 23 - Prob. 4DQCh. 23 - A. What are the two variances between the actual...Ch. 23 - A new assistant controller recently was heard to...Ch. 23 - Would the use of standards be appropriate in a...Ch. 23 - Prob. 8DQCh. 23 - At the end of the period, the factory overhead...Ch. 23 - If variances are recorded in the accounts at the...
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- 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.arrow_forwardSaginaw Company is a garden products wholesale firm. In December, Saginaw Company expects to sell 30,000 bags of vegetable fertilizer at an average price of 5.30 per bag. Actual results are 30,600 bags sold at an average price of 5.20 per bag. Required: 1. Calculate the sales price variance for December. 2. Calculate the sales volume variance for December. 3. Calculate the overall sales variance for December. Explain why it is favorable or unfavorable. 4. What if December sales were actually 29,800 bags? How would that affect the sales price variance? The sales volume variance? The overall sales variance?arrow_forwardRevenue variances Dickinsen Company gathered the following data for December: Sales price per unit Number of units of sales Total sales Planned Actual $5.80 $6.00 x 820,000 x 805,000 $4,756,000 $4,830,000 Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. a. Compute the revenue price variance. b. Compute the revenue volume variance. c. Compute the total revenue variance.arrow_forward
- 8. GP Variance Analysis with Complete Information Nacho Chips Company prepared the following budgetary information for July 2021: Sales (12,000 units) Cost of Goods Sold Gross Profit In July, actual operations resulted in the production and sale of 13,000 units which were sold for a selling price of P 34 per unit. The unit cost of goods sold increased by P 3. REQUIRED: 1. Overall GP variance 2. Sales price variance 3. Sales volume variance 4. Cost price variance 5. Cost volume variance P 432,000 288.000 P 144,000 9. GP Variance Analysis with Incomplete Information Chix Pesto Company has requested you to determine the cause of the difference between its 2020 and 2021 gross profit based on the following data: 1. Overall GP variance 2. Price factor 3. Cost factor 4. Volume factor 2020 P 200,000 120,000 P 80,000 Sales Cost of Goods Sold Gross Profit No additional data was made available except that unit sales increased by 20% in 2021. REQUIRED: 2021 P 252,000 180,000 P 72,000arrow_forwardPlanned sales are 10,000 units at $7.00 per unit. Actual sales are 11,000 units at $6.50 per unit. Which of the following statements is not true? a. The revenue volume variance is favorable. b. The total revenue variance is unfavorable. c. The revenue volume variance is $7,000. d. The revenue price variance is unfavorable.arrow_forwardPrepare an income statement through gross profit for Bellingham Company for the month ending March 31 using the variance data from Brief Exercises 1, 2, 3, and 4. Assume Bellingham sold 15,000 units at $172 per unit.arrow_forward
- Compute for the following and Indicate if its FAVORABLE or UNFAVORABLE. Format: 11,111 F or 11,111 U Total gross profit variance = Price variance =arrow_forwardUsing Control Limits to Determine When to Investigate a Variance Kavallia Company set a standard cost for one item at $328,000; allowable deviation is ± $14,500. Actual costs for the past six months are as follows: June $330,500 September $314,000 July 343,000 October 331,000 August 346,800 November 323,000 Required: 1. Calculate the variance from standard for each month. Variance June $fill in the blank 1 July $fill in the blank 3 August $fill in the blank 5 September $fill in the blank 7 October $fill in the blank 9 November $fill in the blank 11 Which months should be investigated? June July August September October November 2. What if the company uses a two-part rule for investigating variances? The allowable deviation is the lesser of 4 percent of the standard amount or $14,500. Now which months should be investigated? June July August September October Novemberarrow_forwardPresent the gross profit variance analysisarrow_forward
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY