Reference no: EM132716817
Problem - Revenue variances - Lowell Manufacturing Inc. has a normal selling price of $20 per unit and has been selling 125,000 units per month. In November, Lowell Manufacturing decided to lower its price to $19 per unit expecting it can increase the units sold by 16%.
Required -
a. Compute the normal revenue with a $20 selling price.
b. Compute the planned revenue with a $19 selling price.
c. Compute the actual revenue for November, assuming 135,000 units were sold in November at $19 per unit.
d. Compute the revenue price variance, assuming 135,000 units were sold in November at $19 per unit.
e. Compute the revenue volume variance, assuming 135,000 units were sold in November at $19 per unit.
f. Analyze and interpret the lowering of the price to $19.
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