FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Chapter 6 question 3

Please provide and explanation along with the answer

Vaughn Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales
of 2,500 kits was prepared for the year. Fixed operating expenses account for 8% of total operating expenses at this level of sales.
Sales
$ 400,000
Cost of goods sold (all variable)
153,600
Gross margin
246,400
Operating expenses
3,500
Operating income
$ 242,900
Assume that during the year Vaughn Sports actually sold 2,700 volleyball kits during the year at a price of $161 per kit.
Calculate the sales price variance. (If variance is zero, select "Not Applicable" and enter O for the amounts.)
Sales price variance
eTextbook and Media
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Transcribed Image Text:Vaughn Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 8% of total operating expenses at this level of sales. Sales $ 400,000 Cost of goods sold (all variable) 153,600 Gross margin 246,400 Operating expenses 3,500 Operating income $ 242,900 Assume that during the year Vaughn Sports actually sold 2,700 volleyball kits during the year at a price of $161 per kit. Calculate the sales price variance. (If variance is zero, select "Not Applicable" and enter O for the amounts.) Sales price variance eTextbook and Media %24
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