Hollaway Corp. has the following data for the current fiscal year: Actual Budget Sales Units Product X 37,000 98,000 Product Y 123,000 102,000 Total 160,000 200,000 Contribution Margin Product X $ 12.00 $ 11.00 Product Y $ 10.00 $ 9.00 The total sales mix variance for both products is: (Round your percentage answers to 1 decimal place.) Multiple Choice $186,880 favorable. $86,880 favorable. $66,880 favorable. $82,880 unfavorable. $342,880 unfavorable.
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.
Hollaway Corp. has the following data for the current fiscal year:
| Actual | Budget | |||||||
| Sales Units | ||||||||
| Product X | 37,000 | 98,000 | ||||||
| Product Y | 123,000 | 102,000 | ||||||
| Total | 160,000 | 200,000 | ||||||
| Contribution Margin | ||||||||
| Product X | $ | 12.00 | $ | 11.00 | ||||
| Product Y | $ | 10.00 | $ | 9.00 | ||||
The total sales mix variance for both products is: (Round your percentage answers to 1 decimal place.)
-
$186,880 favorable.
-
$86,880 favorable.
-
$66,880 favorable.
-
$82,880 unfavorable.
-
$342,880 unfavorable.
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