Variance analysis, working backward. The Jinwa Corporation sells two brands of wine glasses: Plain and Chic. Jinwa

Question:

Variance analysis, working backward. The Jinwa Corporation sells two brands of wine glasses: Plain and Chic. Jinwa provides the following information for sales in the month of June 2011:

Static-budget total contribution margin...........$11,000

Budgeted units to be sold of all glasses............2,000 units

Budgeted contribution margin per unit of Plain........$4 per unit

Budgeted contribution margin per unit of Chic........$10 per unit

Total sales-quantity variance................$2,200 U

Actual sales-mix percentage of Plain..............60%

All variances are to be computed in contribution-margin terms.

Required

1. Calculate the sales-quantity variances for each product for June 2011.

2. Calculate the individual-product and total sales-mix variances for June 2011. Calculate the individual product and total sales-volume variances for June 2011.

3. Briefly describe the conclusions you can draw from the variances.

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