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Question - Oriole Toys, Inc. expected to sell one plush toy for each two Frisbees sold. Planned sales and variable costs for the year were as follows:
Frisbees
Plush Toys
Total
Sales (100,000 Frisbees)
$310,000
$155,000
$465,000
Variable costs
167,000
48,000
215,000
Contribution margin
$143,000
$107,000
$250,000
During the year, a competitor came out with a similar plush toy at a lower price. Management reacted by dropping its selling price for plush toys, but the results were disappointing. Actual sales were as follows:
Frisbees (95,000 x $3.40) $323,000
Plush toys [40,000 x $2.40) 96,000
Total sales $419,000
Required - Determine the revenue budget variance, the sales price variance, and the revenue sales quantity variance.
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