Question :
21) The sales-mix variance will be unfavorable when:
A) the : 1216970
21) The sales-mix variance will be unfavorable when:
A) the actual sales mix shifts toward the less profitable units
B) the composite unit for the actual mix is greater than for the budgeted mix
C) actual unit sales are less than budgeted unit sales
D) the actual contribution margin is greater than the static-budget contribution margin
22) The sales-mix variance will be favorable when:
A) the actual contribution margin is greater than the static-budget contribution margin
B) actual unit sales are less than budgeted unit sales
C) the actual sales mix shifts toward the less profitable units
D) the composite unit for the actual mix is greater than for the budgeted mix
23) An unfavorable sales-mix variance would most likely be caused by:
A) a new competitor providing better service in the high-margin product sector
B) a competitor having distribution problems with high-margin products
C) the company offering low-margin products at a higher price
D) the company experiencing quality-control problems that get negative media coverage of low-margin products
24) A shift towards a mix of products with a lower contribution margin per unit will most likely result in a(n):
A) unfavorable sales-mix variance
B) unfavorable sales-quantity variance
C) favorable sales-mix variance
D) favorable sales-quantity variance
25) The sales-quantity variance will be favorable when:
A) budgeted units of all products sold exceed actual units of all products sold
B) actual units of all products sold exceed budgeted units of all products sold
C) the actual sales mix shifts towards the less profitable units
D) the static budget contribution is greater than the actual contribution margin
26) The sales-quantity variance will be unfavorable when:
A) the composite unit for the actual mix is greater than for the budgeted mix
B) actual unit sales are less than budgeted unit sales
C) the actual contribution margin is greater than the static-budget contribution margin
D) the actual sales mix shifts toward the less profitable units
27) A favorable sales-quantity variance would most likely be caused by:
A) a new competitor providing better service in the high-margin product sector
B) a competitor having distribution problems with high-margin products
C) the company offering low-margin products at a higher price
D) the company experiencing quality-control problems that get negative media coverage of low-margin products
28) The formula (budgeted contribution margin based on actual units sold of all products at the budgeted mix) – (contribution margin in the static budget) which is based on budgeted units of all products to be sold at budgeted mix) is equal to the:
A) sales-volume variance
B) sales-mix variance
C) sales-quantity variance
D) Both A and B are correct.
29) The sales-quantity variance results from a difference between:
A) the actual sales mix and the budgeted sales mix
B) the actual quantity of units sold and the budgeted quantity of unit sales in the static budget
C) actual contribution margin and the budgeted contribution margin
D) actual market size in units and the budgeted market size in units
Answer the following questions using the information below:
Shaghai Tea Products has an exclusive contract with British Distributors. Calamine and Shanghai are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:
ActualBudget
Calamine ShanghaiCalamine Shanghai
Sales in pounds3,400 lbs.3,600 lbs.4,000 lbs.3,000 lbs
Price per pound$2.50$2.50$2.00$3.00
Variable cost per pound1.002.001.001.50
Contribution margin$1.50$0.50$1.00$1.50
Budgeted and actual fixed corporate-sustaining costs are $1,750 and $2,000, respectively.
30) What is the actual contribution margin for the month?
A) $7,500
B) $8,800
C) $8,500
D) $6,900
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