(Appendix 11A) Kyekyeku Company retails two models of a product: Model X and Model Y. It considers both products to be close substitutes. The following data relate to the company's operations for last year:

-(Appendix 11A)What were the sales mix variances for Model X and Model Y,respectively,for last year?
A) $1,050 unfavourable and $1,596 unfavourable.
B) $1,260 favourable and $1,680 unfavourable.
C) $1,260 unfavourable and $1,680 favourable.
D) $1,500 favourable and $2,000 favourable.

Question

(Appendix 11A) Kyekyeku Company retails two models of a product: Model X and Model Y. It considers both products to be close substitutes. The following data relate to the company's operations for last year:

-(Appendix 11A) What were the sales mix variances for Model X and Model Y,respectively,for last year?

-(Appendix 11A)What were the sales mix variances for Model X and Model Y,respectively,for last year?
A) $1,050 unfavourable and $1,596 unfavourable. 
B) $1,260 favourable and $1,680 unfavourable. 
C) $1,260 unfavourable and $1,680 favourable. 
D) $1,500 favourable and $2,000 favourable.

Quizplus · Accepted Answer

Sales mix variance for Model X = (Mix % of Model X – Budgeted Mix % of Model X) x Total Budgeted Sales

= (40% - 50%) x $24,000 = $2,400 unfavorable

Sales mix variance for Model Y = (Mix % of Model Y – Budgeted Mix % of Model Y) x Total Budgeted Sales

= (60% - 50%) x $24,000 = $2,400 favorable

Therefore, the total sales mix variance for Model X and Model Y is $1,260 unfavorable and $1,680 favorable, respectively. The answer is option C.

(Appendix 11A) Kyekyeku Company Retails Two Models of a Product