Sales Variances Assume that Casio Computer Company, LTD. sells handheld communic

Question

Sales Variances Assume that Casio Computer Company, LTD. sells handheld communication devices for $120 during August as a back-to-school special. The normal selling price is $180. The standard variable cost for each device is $60. Sales for August had been budgeted for 500,000 units nationwide; however, due to the slowdown in the economy, sales were only 450,000. Compute the revenue, sales price, sales volume, and net sales volume variances. Revenue $Answer Incorrect AnswerCorrect Sales Price $Answer Incorrect AnswerCorrect Sales volume variance $Answer Incorrect AnswerCorrect Net sales volume variance $Answer Incorrect AnswerCorrect

Explanation / Answer

Information required is calculated as under:

Budgeted units 5,00,000 4,50,000 Selling price 180 120 Variable Cost 60 60 Net profit 120 60 Revenue 450,000*120 540,00,000 Sales price 120 Sale volume 4,50,000 Sale volume variance 50,000*120 (Budgeted sales-actual sales)*Budgeted profit 60,00,000

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