ACCA PM · Chapter 12 · Question 6 of 12
Mu Co sells products G and H. Budgeted sales were 3,000 units of G and 2,000 units of H. Standard contribution is $10 per unit for G and $20 per unit for H. Actual sales were 3,600 units of G and 1,900 units of H. What is the total sales mix contribution variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $3,000 adverse
Explanation
Actual total sales = 5,500 units. In budgeted mix (60:40): G 3,300 and H 2,200. G: (3,600 - 3,300) x $10 = $3,000 favourable. H: (1,900 - 2,200) x $20 = $6,000 adverse. Mix variance = $3,000 adverse, because the mix shifted towards G, which earns less contribution per unit.
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