Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 13 Aug 2017 My Price 9.00

Organic Products

Organic Products estimates the following selling expenses next period:
Salaries (fixed) ........................................................................................ $ 30,000
Commissions (0.05% of sales revenue) ...................................................... 17,875
Travel (0.03% of sales revenue).................................................................. 10,725
Advertising (fixed)...................................................................................... 60,000
Sales Office Costs ($3,750 plus $0.05 per unit sold) .................................... 7,000
Shipping Costs ($0.10 per unit sold) ............................................................. 6,500
Total Selling Expenses ............................................................................ $132,100

a. Derive the cost equation (y = a + bx) for selling expenses.
b. Assume that Organic actually sells 50,000 units during the period at an average price of $6 per unit. The company had budgeted sales for the period to be: volume, 65,000 units; price, $5.50. Calculate the sales price and volume variance.
c. The actual selling expenses incurred during the period were $80,000 fixed and $30,000 variable. Prepare a profit variance analysis for sales revenue and selling expenses.

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Maurice Tutor
(5)
Status NEW Posted 13 Aug 2017 09:08 PM My Price 9.00

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