Answered step by step
Verified Expert Solution
Question
1 Approved Answer
How can the concept of a composite unit be used to explain why an unfavourable total sales - mix variance of contribution margin occurs? Question
How can the concept of a composite unit be used to explain why an unfavourable total salesmix variance of contribution margin occurs?
Question content area bottom
Part
A
The total salesmix variance arises from differences in the budgeted contribution margin of the actual and budgeted sales mix. The composite unit concept enables the effect of individual product changes to be summarized in a single intuitive number by using weights based on the mix of individual units in the actual and budgeted mix of products sold.
B
The total salesmix variance arises from differences in the budgeted contribution margin of the actual units at the budgeted mix and the contribution margin in the static budget. The composite unit concept enables the effect of individual product changes to be summarized in a single intuitive number by using weights based on the mix of individual units in the budgeted and static mix of products sold.
C
The total salesmix variance arises from differences in the budgeted contribution margin of the budgeted and static sales mix. The composite unit concept enables the effect of all the product changes to be summarized in a grouped intuitive number by using weights based on the mix of all units in the actual and budgeted mix of products sold.
D
The composite unit concept has no impact on an unfavourable total salesmix variance. This concept only impacts the marketsize variance.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started