1 answer

Rockport Industries Inc. gathered the following data for March: Planned Actual Sales price per unit $150...

Question:

Rockport Industries Inc. gathered the following data for March:

Planned Actual
Sales price per unit $150 $144
Number of units of sales × 12,500 × 12,900
Total sales $1,875,000 $1,857,600

Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

a. Compute the revenue price variance.

$

b. Compute the revenue volume variance.

$

c. Compute the total revenue variance.

$

Answers

Ans. A Revenue price variance =   (Actual price - Planned price) * Actual quantity sold
($144 - $150) * 12,900
-$6 * 12,900
-$77,400 (or    $77,400 unfavorable)
Ans. B Revenue volume variance =   (Actual units - Planned units) * Planned price
(12,900 - 12,500) * $150
400 * $150
$60,000 favorable
Ans. C Total revenue variance = Actual sales - Planned sales
$1,857,600 - $1,875,000
-$17,400 (or    $17,400 unfavorable)
*If Actual sales price, volume and total sales are higher than planned then the variance becomes favorable.
*If Actual sales price, volume and total sales are less than planned then the variance becomes unfavorable.
.

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