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Question - Sara's Systems manufactures audio systems for cars. Two models are produced: The Standard model has a budgeted price of $175 and a standard variable cost of $55. The Blaster model has a budgeted price of $455 and a standard variable cost of $135. At the beginning of the year, Sara estimated that she would sell 5,900 Blaster models and 23,600 Standard models. The actual results for the year showed that 7,140 Blaster models were sold for total revenues of $3,213,000. A total of 25,500 Standard models were sold for revenues of $5,610,000.
Required:
a. Compute the activity variance for the year.
b. Compute the mix and quantity variances for the year.
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