US CMA Part 1 · Chapter 3 · Question 4 of 30
Budgeted sales were 6,000 units of Product X (contribution margin $20 per unit) and 4,000 units of Product Y (contribution margin $35 per unit). Actual sales were 7,700 units of X and 3,300 units of Y. What is the sales mix variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $16,500 unfavorable
Explanation
Budgeted mix is 60% X / 40% Y; actual total units = 11,000, with an actual mix of 70% X / 30% Y. Mix variance = sum of (actual mix % - budgeted mix %) x actual total units x budgeted CM per unit. X: (70% - 60%) x 11,000 x $20 = $22,000 F. Y: (30% - 40%) x 11,000 x $35 = $38,500 U. Net = $16,500 unfavorable, because the mix shifted toward the lower-margin product. (The sales quantity variance would be 1,000 x $26 = $26,000 favorable.)
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