A company analyzes its data and assesses that because of price increases in some products, customers shifted their product purchases to products that differed from what was originally forecasted. Ultimately, the products that were purchased had lower margins. As a result, the company experienced lower end-of-the-year profitability. What type of analysis is this?
A) Net profit analysis
B) Product mix variance
C) Contribution margin variance
D) Customer mix variance

Question

Quizplus · Accepted Answer

This scenario describes a product mix variance, where changes in the sales mix of products with different profit margins affect overall profitability.

A Company Analyzes Its Data and Assesses That Because of Price