5. (Sales Variances) William Wong manages the marketing department at Festive Figurines Limited. He is evaluated based on his ability to meet budgeted revenues. For May 2008, his revenue budget was as follows:
Price Per Unit Unit Sales
Daniel Boone $240 1,600
Funny Bunny 130 2,150
Barbie Doll 160 4,200
The actual sales generated by the marketing department in May were as follows:
Price Per Unit Total Sales Dollars
Daniel Boone $230 $391,000
Funny Bunny 140 282,800
Barbie Doll 150 622,500
a) For May 2008, compute the sales price variance for Festive Figures for each product.
b) For May 2008, compute the sales volume variance for Festive Figures
Assuming that the variances you computes in parts (a) and (b) are controllable by William Wong, discuss what actions he may have taken to cause results to deviate from budgeted results.
The answer contains the computation of sales variances.