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The WriteAll Company sells two types of pens - rollerball and ballpoint - to specialty retailers. The company budgets by month in order to anticipate the peak demands occurring at various times during the year. The following information is available for July.

-How much is the total contribution-margin sales-mix variance?
A) $ 4,000 unfavorable
B) $12,500 unfavorable
C) $ 0
D) $ 8,500 unfavorable

Question

Use the following to answer questions:
The WriteAll Company sells two types of pens - rollerball and ballpoint - to specialty retailers. The company budgets by month in order to anticipate the peak demands occurring at various times during the year. The following information is available for July.
 
-How much is the total contribution-margin sales-mix variance?
A) $ 4,000 unfavorable 
B) $12,500 unfavorable 
C) $ 0 
D) $ 8,500 unfavorable

Quizplus · Accepted Answer

The total contribution-margin sales-mix variance is $4,000 unfavorable. This is because the actual sales mix is less profitable than the budgeted sales mix. The actual sales mix has a higher proportion of low-margin products than the budgeted sales mix.

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