Hang 10 Inc. produces two types of surfboards: basic and deluxe. The basic surfboard sells for $25 and the deluxe sells for $100. Hang 10 is budgeting sales for 2016 of 1,000 basic surfboards and 650 deluxe. Variable costs associated with the basic surfboard amount to $10 and $40 for the deluxe. Actual units sold were 1,200 basic and 550 deluxe.
Required:
a. Calculate the contribution margin variance
b. Calculate the sales mix variance

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The Answer of Hang 10 Inc. produces two types of surfboards: basic and deluxe. The basic surfboard sells for $25 and the deluxe sells for $100. Hang 10 is budgeting sales for 2016 of 1,000 basic surfboards and 650 deluxe. Variable costs associated with the basic surfboard amount to $10 and $40 for the deluxe. Actual units sold were 1,200 basic and 550 deluxe.
Required:
a. Calculate the contribution margin variance
b. Calculate the sales mix variance