Rogers Sports sells volleyball kits that it purchases from a sports equipment di

Question

Rogers Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 1,500 kits was prepared for the year. Fixed operating expenses account for 60% of total operating expenses at this level of sales.

Sales $ 75,000

Cost of goods sold (all variable) 45,000

Gross margin 30,000

Operating expenses 26,250

Operating income $ 3,750

Assume that during the year Rogers Sports actually sold 1,575 volleyball kits during the year at a price of $36 per kit. Calculate the sales price variance. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Explanation / Answer

percentage 60% 63% units 1500 1575 sp 50 36 sales 75000 56700 cogs 45000 gross margin 30000 operating expenses 26250 operating income 3750 sales price variance = 1575*(50-36) ie= 22050(U)

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