sales price and sales quantity variances

Managing a company’s product mix is crucial to the long-term strategy of the company. For retail companies like grocery stores, “loss leaders” are often advertised to entice customers into the store in hopes that, while there, the customer will buy more than just what was advertised.

Discuss the ethical implications of this type of advertising from the point of view of the store and the customer.

Your company has just signed several long-term contracts for several million dollars. Since the contracts are legally binding, your boss wants you to record these contacts as a debit to accounts receivable and a credit to contract revenue earned.

Discuss the ethical implications of your boss’s request.

Rasmussen, CPAs, completed 1,800 tax returns for clients during 2008. The average price paid per return was $165. The firm’s master budget indicated expected tax return revenues of $308,000 based on 2,000 expected returns.

What are the sales price and sales quantity variances?


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