Question

Revenue variances Rosenberry Company computed the following revenue variances for January: Line Item Description Amount Revenue Price Variance (350,000) favorable Revenue Volume Variance 50,000 unfavorable. Assuming that the planned selling price per unit was $10 and that actual sales were 175,000 units, determine the following: Planned number of units that were to be sold in January?

Answer 1

The planned number of units that were to be sold in January can be calculated using the revenue variances and the planned selling price per unit. By dividing the revenue price variance by the planned selling price per unit, we can find the difference in the number of units sold.

Step-by-step explanation:

The planned number of units that were to be sold in January can be calculated using the revenue variances and the planned selling price per unit. The revenue price variance is given as $350,000 favorable, which means that the actual revenue exceeded the planned revenue by $350,000. The revenue volume variance is given as $50,000 unfavorable, which means that the actual sales volume was lower than the planned sales volume by $50,000.

By dividing the revenue price variance by the planned selling price per unit, we can find the difference in the number of units sold. In this case, $350,000 divided by $10 gives us 35,000 units. Therefore, the planned number of units that were to be sold in January is 35,000 units.