Calculate the sales-mix variance for each product

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Reference no: EM133091319

Question - Alum manufactures aluminum strips for commercial building construction. Alum makes three types of strips 1/8 inch, 1/4 inch and 1/2 inch. Actual and Budget operating data by product for the most recent reporting period are as follows:

ACTUAL BUDGET 1/8 1/4 1/2 1/8 1/4 1/2

Sales-# units 84 126 210 200 100 200

Price/unit $25 $32 $45 $20 $30 $40

Var. Cost/unit $16 $18 $22 $15 $17 $20

Required -

a. Calculate the sales-mix variance for each product and in total.

b. Calculate the sales-quantity variance for each product and in total.

c. Provide an explanation for what is driving the sales-mix variance. Discuss an issue, not the numerical variance amounts.

Reference no: EM133091319

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