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Hi Sir,
Can you please help to calculate the below question. Thank you.
A company has budgeted on selling 7,000 units of product X at a selling price of $30per unit, and 3000 units of product Y at a selling price $40 per unit.
The standard contribution per unit is 30% of selling price for both products.
They actuary sell 8000 units of X and 7000 units of Y.
what is the sales mix variance?
Maas: Have you watched the free lectures on mix and yield variances?
The standard contributions per unit are $9 for X, and $12 for Y.
The actual mix is 8000 X’s and 7000 Y’s
(that is a total of 15000 units)If the 15000 units were in standard mix, there would be 7/10 x 15000 = 10500 X’s, and 3/10 x 15000 = 4500 Y’s.
If you cost out the actual mix at standard contribution, and the standard mix (for the actual total of 15000) at standard contribution, then the difference is the mix variance.
Thank you so much.
Sir is the answer 7500/-. Mistakenly I calculate with the selling price. when its come to sales mix variance should we always calculate with the contribution?
I watched all the video lectures and one of the best online lectures I have watched. But when its come to exam questions I really do stupid mistakes. I don’t think I can score on Mixed yield variance 🙁 .
Yes – the answer is 7500.
Sales mix variance is always calculated using standard contribution (if it is marginal costing) or with standard profit (if it is absorption costing, which is less likely).
Hi Sirs,
The actual mix is 8000 X’s and 7000 Y’s
(that is a total of 15000 units)If the 15000 units were in standard mix, there would be 7/10 x 15000 = 10500 X’s, and 3/10 x 15000 = 4500 Y’s.
Where do you get 7/10 from?
Hi Thanh,
It’s the standard mix 7000 ‘X and 3000 Y, therefore (7+3=10)
X’ =7/10 x 15000 = 10500
Y’ =3/10 x 15000 = 4500Thanks… I wasn’t paying attention to the question.
The standard or budget volume is stated in the question. 7x and 3y
Many thanks
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