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What is sales price variance for wholesale distribution

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Reference no: EM133023980

Question - John, a staff accountant, is working with the revenue variances for his company, MK Products. MK products sells its product through five different distribution channels: retail, wholesale, online, virtual reality, and its newest distribution method, time travel (if you have to ask, it's not for you).

The following information is available for the wholesale distribution channel

The budgeted sales in units via the wholesale channel is 2,400

The budgeted price for wholesale sales is $20 per unit

The actual sales in units via the wholesale channel is 3,000

The actual price for wholesale sales is $18 per unit.

Also, the company actually sold a total of 20,000 units (across all five distribution channels). This is less than the budgeted total sales (across all five distribution channels), which was 24,000 units.

Required -

Q1. What is the sales price variance for the wholesale distribution channel?

Q2. Use the information from the John - MK Products problem (above) to calculate the wholesale sales mix variance.

Q3. Use the information from the John - MK Products problem (above) to calculate the wholesale sales activity variance.

Q4. Related to your calculations for the John - MK Product problem, which of the following statements are true? (Check all that apply.)

1. The wholesale sales price variance is favorable.

2. The wholesale sales mix variance is favorable.

3. The wholesale sales activity variance is favorable.

Reference no: EM133023980

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