• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Sales Mix Variance; Kaplan Exam Kit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Sales Mix Variance; Kaplan Exam Kit

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 19, 2015 at 10:11 am #283884
    veselinnachristova
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    Hello, Mr Moffat.

    Jones’ monthly absorption costing variance analysis report includes a sales mix variance, which indicates the effect on profit of actual sales mix differing from the budgeted sales mix. The following data are available:

    PRODUCT X
    Selling price = $12
    (Variable Cost) = ($6)
    (Fixed Cost) = ($2)
    Standard net profit per unit = $4

    PRODUCT Y
    Selling price = $11
    (Variable Cost) = ($2)
    (Fixed Cost) = ($3)
    Standard net profit per unit = $6

    July sales (units):
    PRODUCT X
    Budget = 3,000
    Actual = 2,000

    PRODUCT Y
    Budget = 6,000
    Actual = 8,000

    What is the favourable sales mix variance for July?
    A) $8,000
    B) $5,333
    C) $4,000
    D) $2,667

    My answer (which is wrong) is C) $4,000.
    Actual mix = 2,000 units + 8,000 units = 10,000 units
    Standard Mix = (10,000u x 4/10) + (10,000u x 6/10) = 4,000u + 6,000u
    Standard Profit from Actual Mix = (2,000 units x $4) + (8,000 units x $6) = $56,000
    Standard Profit from Standard Mix = (4,000 units x $4) + (6,000 units x $6) = $52,000
    Difference = $4,000

    The correct answer is D) $2,667
    10x – (2 x $4 + 8 x $6) = $2,667

    I will be really grateful, if you explain to me why is answer D correct, because I… I just don’t get it. I cannot even understand their solution.
    Thank you.

    November 19, 2015 at 11:01 am #283907
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    It is your standard mix that is wrong.

    They budgeted on selling 9,000 in total of which 3,000 (1/3) are X and 6,000 (2/3) are Y.

    Therefore standard mix for the actual total sales of 10,000 would be:
    X: 1/3 x 10,000 = 3,333; Y: 2/3 x 10,000 = 6,667

    This would give a profit of (3,333 x $4) + (6,667 x $6) = $53,333

    If you compare this with the standard profit for the actual mix of $56,000 you get a favourable variance of $2,667.

    November 19, 2015 at 11:08 am #283910
    veselinnachristova
    Member
    • Topics: 2
    • Replies: 2
    • ☆

    Thank you very much!

    November 19, 2015 at 11:10 am #283914
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • daliuske on Financial management objectives – ACCA Financial Management (FM)
  • ksmigulec on Management of Working Capital  – Introduction – ACCA Financial Management (FM)
  • tmatanga2008@gmail.com on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • John Moffat on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • John Moffat on Capital asset pricing model (part b) – ACCA Financial Management (FM)

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy