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Iliff, Inc., produces and sells two types of countertop ovens-the toaster oven and the convection oven. Budgeted and actual data for the two models are
Iliff, Inc., produces and sells two types of countertop ovens-the toaster oven and the convection oven. Budgeted and actual data for the two models are shown below. Budgeted Amounts: Toaster Convection Oven Oven Total Sales: ($90 x 25,000) $2,250,000 ($150 x 15,000) $2,250,000 $4,500,000 Variable expenses 500,000 750,000 1,250,000 Contribution margin $1,750,000 $1,500,000 $3,250,000 ) Actual Amounts: Toaster Convection Oven Oven Total Sales: ($88 x 25,800) $2,270,400 ($160 x 14,000) $2,240,000 $4,510,400 Variable expenses 541,800 742,000 1,283,800 Contribution margin $1,728,600 $1,498,000 $3,226,600 Required: 1. Calculate the sales mix variance. $ Unfavorable 2. What if actual units sold of the toaster oven increased? How would that affect the sales mix variance? It would become more unfavorable or less favorable. What if actual units sold of the convection oven increased? How would that affect the sales mix variance? It would become less unfavorable or more favorable
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