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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 3
PRICING STRATEGY, SALES VARIANCES
Hanadarko, Inc., manufactures and sells three products: K, M, and P. In January, Hanadarko, Inc., budgeted sales of the following.
At the end of the year, actual sales revenue for Product K and Product M was $5,600,000 and $3,270,000, respectively. The actual price charged for Product K was $50 and for Product M was $20. Only $10 was charged for Product P to encourage more consumers to buy it, and actual sales revenue equaled $600,000 for this product.
Required:
1. Calculate the sales price and price volume variances for each of the three products based on the original budget.
2. Suppose that Product P is a new product just introduced during the year. What pricing strategy is Hanadarko, Inc., following for this product?
Hanadarko, Inc., manufactures and sells three products: K, M, and P. In January, Hanadarko, Inc., budgeted sales of the following.
At the end of the year, actual sales revenue for Product K and Product M was $5,600,000 and $3,270,000, respectively. The actual price charged for Product K was $50 and for Product M was $20. Only $10 was charged for Product P to encourage more consumers to buy it, and actual sales revenue equaled $600,000 for this product.
Required:
1. Calculate the sales price and price volume variances for each of the three products based on the original budget.
2. Suppose that Product P is a new product just introduced during the year. What pricing strategy is Hanadarko, Inc., following for this product?
Explanation
Verified
Verified
1)
Compute the sales price and price vo...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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