If the budgeted contribution margin for budgeted and actual sales mix are $35000 and $27000, then the sales mix variance will be __________?
Correct answer: A. $8,000
- A. $8,000
- B. $80,000
- C. $62,000
- D. $35,000
Explanation
Sales mix variance is found by comparing contribution margin under the budgeted mix with contribution margin under the actual mix: $35,000 − $27,000 = $8,000. Since the actual mix produces the lower contribution margin, the variance is unfavorable, although the option states only its amount.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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