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 2,000 kits was prepared for the year Fixed operating expenses account for 80% of total operating expenses at this level of sales. Sales Cost of goods sold (all variable) 60,000 Gross margin Operating expenses Operating income $100,000 40,000 35,000 5,000 Assume that during the year Rogers Sports actually sold 2,100 volleyball kits during the year at a price of $48 per kit Calculate the sales price variance. (If variance is zero, select "Not Applicable" and enter for the amounts.) Sales price variance s Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Sales price variance = [(2,100 * $48) - (2,100 * ($100,000 / 2,000)]

Sales price variance = $100,800 - $105,000

Sales price variance = $4,200 unfavorable

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