Lofty Bread Ltd is a baking company that operates in Thailand. The company produces two types of bread—a full loaf and a mini loaf. A full loaf is 8 inches long and a mini loaf is 3 inches long. Each full loaf is sold for ฿50 and each mini loaf is sold for ฿30. Lofty’s budget and actual figures for the last year were as follows:

Required

The budgeted contribution to sales ratios for the two types of valet are 44.6% for full loafs and 55% for mini loafs.

Using the data provided for full valets and mini loafs, compute:

1. The total sales-mix contribution variance.

2. The total sales-quantity contribution variance.

3. Briefly differentiate between sales-mix and sales-quantity variances.

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Number of valets: Full loafs Mini loafs Revenue Variable costs: Wages Baking materials Utilities Contribution Fixed costs: Rent and rates Operating income $114,000 B 6,200 B6,520 Budget 3,600 2,000 $240,000 B126,720 $113,280 36,800 B 76,480 $122,000 $ 12,400 9,200 Actual 4,000 3,980 $319,400 B143,600 $175,800 $36,800 B139,000