Saginaw Company is a garden products wholesale firm. In December, Saginaw Company expects to sell 26,000...
Saginaw Company is a garden products wholesale firm. In December, Saginaw Company expects to sell 26,000 bags of vegetable fertilizer at an average price of $5.6 per bag. Actual results are 26,700 bags sold at an average price of $5.5 per bag.
Required:
1. Calculate the sales price variance for
December.
$
2. Calculate the sales volume variance for
December.
$
3. Calculate the overall sales variance for
December.
$
4. What if December
sales were actually 25,800 bags calculate the new sales price
variance?
$
The sales volume variance?
$
The overall sales variance?
$
Homework Answers
1) Sales price variance = (5.6-5.5)*26700 = 2670 U
2) Sales volume variance = (26000-26700)*5.6 = 3920 F
3) Overall sales variance = (26000*5.6)-(26700*5.5) = 1250 F
4) Sales price variance = (5.6-5.5)*25800 = 2580 U
5) Sales volume variance = (26000-25800)*5.6 = 1120 U
6) Overall sales variance = (26000*5.6)-(25800*5.5) = 3700 U
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