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Sales-mix and sales-quantity variances. Lofty Bread Ltd is a baking company that operates in Thailand. The company produces two types of breada full loaf and

Sales-mix and sales-quantity variances. Lofty Bread Ltd is a baking company that operates in Thailand. The company produces two types of breada 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. Loftys budget and actual figures for the last year were as follows:

Budget Actual Number of valets: Full loafs 3,600 4,000 Mini loafs 2,000 3,980 Revenue 240,000 319,400 Variable costs: Wages 114,000 122,000 Baking materials 6,200 12,400 Utilities 6,520 9,200 126,720 143,600 Contribution 113,280 175,800 Fixed costs: Rent and rates 36,800 36,800 Operating income 76,480 139,000 Note: The currency of Thailand is the Thai Baht and the currency symbol is .

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:

Required 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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