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Which two of the following statements are true?
1. The sales mix variance would not give useful information to the management of Fort Co if the Cracker was a van.
2. The sales mix variance will not be affected if the labour efficiency on the Drastic production line increases, all other factors remaining the same.
3. The market share variance is a planning variance, not an operational variance.
4. If the mix variance was calculated as a physical quantity, the answer would always be zero.The answer for the above question is 1 and 4. Could you kindly explain why 1 and 4 are correct? Thank you!
I do not have the Kaplan Exam Kit (only the BPP Revision Kit), so I am unable to help you with 1.
As regards 4, this is always the case as I explain in my free lectures on mix and yield variances.
If they use more units of 1 material then automatically they will use less units of the other materials. When calculating the mix variance, we use the same total quantity and compare actual mix with standard mix.
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