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Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild, and sold to retail outlets.
Special Tea Products (STP) has an exclusive contract with Tea Distributors. Two brands of Teas are imported, Strong and Mild, and sold to retail outlets. The monthly budget for the contract is based on a combination of last year's performance, a forecast of general industry sales, and the company's expected share of the Canadian market for imported Tea. The following information is provided for the month of May: Budgeted Mild Actual Mild Budgeted Strong Price per kg Variable cost /kg Cont. margin $2.00 1.00 $1.00 $3.00 1.50 $1.50 Actual Strong $2.50 1.00 $1.50 $2.50 2.00 $0.50 2,000 1,500 1,700 1,800 Sales (in kg) Budgeted fixed costs are $1,750. Actual fixed costs are $2,000. What is the STP total sales - mix variance for contribution margin? A. $450 favourable B. $300 favourable C. $150 favourable D. $150 unfavourable O E. $0
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