ACCY 302 (Chen)
Additional Study Questions
Peterson, Inc., manufactures and sells three products: A, B, and C. In January, Peterson, Inc., budgeted sales
of the following.
At the end of the year, actual sales for Product A and Product B were $4,580,000 and $2,415,000
respectively. The actual price charged for each was equal to the budgeted price. Product C, however, had
revenues of $500,000. While total revenue was higher than expected, the actual price of $10 represented a
last-minute revision from budget to increase consumer acceptance of the product.
Calculate the sales price variance and price volume variance for each of the three products based
on the original budget.
Swan is a specialty chemical produced in batches.
Normal denominator volume is 100 batches per week.
The weekly flexible budget for indirect costs is $1600 plus $5 per standard hour of direct labor.
are absorbed on the basis of standard hours of direct labor.
Data for the week just ended are:
Production amounted to 103 batches
There were 315 hours of direct labor used, costing $2,472.
The standards allow 3 hours of direct labor per batch
Actual variable overhead for the week was $1,550
Actual fixed overhead for the week was $3,700
Calculate the following variances:
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