MANAGERIAL ACCOUNTING
MANAGERIAL ACCOUNTING
17th Edition
ISBN: 9781264151455
Author: Garrison
Publisher: MCG
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Chapter 9, Problem 9E
To determine

Introduction: The difference between the planning budget and the flexible budget is known as activity variance. It arises due to the difference between the planned activity level and the actual activity level.

The planning budget for June.

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A company enters into a contract to sell 70 products to a customer for $80 each.  After the company transfers 30 of the 70 products, the customer orders an additional 25 products.  The contract is modified, and the additional 25 products are priced at $40 each.  $40 is not reflective of the product's standalone selling price.  What is the price per product for the remaining 65 products (40 products from the original contract and 25 products from the modification)?      A. $80 for the remaining 40 from the original contract and $40 for the additional 25products from the modification        B. $60, the average of the prices for the remaining products        C. $40, the new price for the products specified in the contract modification        D. $64.62, the blended price for the products from the original contract and the modification
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