Buy Best Inc. sells electronic equipment. Management decided early in the year t
ID: 2421424 • Letter: B
Question
Buy Best Inc. sells electronic equipment. Management decided early in the year to reduce the price of the speakers in order to increase sales volume. As a result, for the year ended December 31, the sales increased by $31,125 from the planned level of $1,057,875. The following information is available from the accounting records for the year ended December 31.
Actual Planned Increase or (Decrease) Sales $1,089,000 $1,057,875 $31,125 Number of units sold 36,300 32,550 3,750 Sales price $30.00 $32.50 $(2.50) Variable cost per unit $11.00 $11.00 0.00Explanation / Answer
Sales price = ( planned price - actual price ) Actual qyt
= (32.50 - 30) 36,300
= 90,750(U)
Sales quantiry variance = (planned units - actual units)planned price
= (32,550 - 36,300) 32.50
= 121,875(F)
Sales price = ( planned price - actual price ) Actual qyt
= (32.50 - 30) 36,300
= 90,750(U)
Sales quantiry variance = (planned units - actual units)planned price
= (32,550 - 36,300) 32.50
= 121,875(F)
B) No since unit increased by 3750 * 11 = $41,250 variable cost whereas sale increased by $31,125Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.