Can you explain the solution below ? how did they calculate the sales revenue ? It doesn't make sense if they sold them at 36.00 I'm confusedMarigold Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 1,420 kits was prepared for the year. Fixed operating expenses account for 57% of total operating expenses at this level of sales.Sales $71,000 Cost of goods sold (all variable) 42,600 Gross margin 28,400 Operating expenses 24,850 Operating income $3,550 Assume that Marigold Sports actually sold 1,491 volleyball kits during the year at a price of $36 per kit.Calculate the sales volume variance for sales revenue and cost of goods sold. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Flexible Budget Sales Volume Variance Static BudgetUnit Sales 1491 71 UnfavorableFavorableNot Applicablef1420Sales revenue $74550 $3550 Not ApplicableFavorableUnfavorablef$7100Cost of goods sold 44730 2130 UnfavorableNot ApplicableFavorableu42600

This budget can be understood in the following manner :

Answered: Can you explain the solution below ?…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 20E: Eastman, Inc., manufactures and sells three products: R, S, and T. In January, Eastman, Inc.,...

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Can you explain the solution below ? how did they calculate the sales revenue ? It doesn't make sense if they sold them at 36.00 I'm confused

Marigold Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 1,420 kits was prepared for the year. Fixed operating expenses account for 57% of total operating expenses at this level of sales.

Sales	$	71,000
Cost of goods sold (all variable)		42,600
Gross margin		28,400
Operating expenses		24,850
Operating income	$	3,550

Assume that Marigold Sports actually sold 1,491 volleyball kits during the year at a price of $36 per kit.

Calculate the sales volume variance for sales revenue and cost of goods sold. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

	Flexible Budget	Sales Volume Variance			Static Budget
Unit Sales	1491	71	UnfavorableFavorableNot Applicable	f	1420
Sales revenue	$ 74550	$ 3550	Not ApplicableFavorableUnfavorable	f	$ 7100
Cost of goods sold	44730	2130	UnfavorableNot ApplicableFavorable	u	42600

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