Sales Mix Variances

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August 25, 2020 at 12:39 am #581822
thuongha
Member
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Hi Sir,
In Kaplan exam kit, there are two MCQs on calculating sales mix variance with similar info, but one multiplied the mix by standard contribution and one used standard profit.
Could you advise on the difference and when to use which please?
Thank you so much.
August 25, 2020 at 7:05 am #581844
John Moffat
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If the company is using marginal costing we use contribution. If they are using absorption costing we use the profit. Just as we do with the basic sales volume variance.
The question will always make it clear in one form or another which costing system is being used.
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