Gourmet Aroma Coffee House has an exclusive contract with Columbia exporters. Two brands of gourmet coffee are imported, Morning Thunder (MT) and Evening Tender (ET). The following data are provided for the current fiscal year: Budgeted Operating Results MT ET MT ET Price per pound $ 40 $ 70 $ 50 $ 65 Variable cost per pound 20 42 23 46 Sales (in pounds) 4,600 4,600 4,386 5,814 The total market was estimated to be 76,000 pounds at the time of budget. The actual total market for the year is 71,000 pounds. What is the firm's total sales mix variance? Multiple Choice $14,472 favorable. $2,530 unfavorable. $5,712 favorable. $6,072 unfavorable. $10,432 favorable.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Q40
Gourmet Aroma Coffee House has an exclusive contract with Columbia exporters. Two brands of gourmet coffee are imported, Morning Thunder (MT) and Evening Tender (ET). The following data are provided for the current fiscal year:
| Budgeted | Operating Results | |||
|---|---|---|---|---|
| MT | ET | MT | ET | |
| Price per pound | $ 40 | $ 70 | $ 50 | $ 65 |
| Variable cost per pound | 20 | 42 | 23 | 46 |
| Sales (in pounds) | 4,600 | 4,600 | 4,386 | 5,814 |
The total market was estimated to be 76,000 pounds at the time of budget. The actual total market for the year is 71,000 pounds.
What is the firm's total sales mix variance?
-
$14,472 favorable.
-
$2,530 unfavorable.
-
$5,712 favorable.
-
$6,072 unfavorable.
-
$10,432 favorable.
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