The Next Year's Budget for Trend, Inc At the End of the Year, the Total Fixed Costs

question 30

Multiple Choice

The next year's budget for Trend, Inc., a multi-product company, is given below: $\begin{array}{lrrrr}&\text { Product A } & \text { Product B }\\\text { Sales } & \$ 1,890,000 & \$ 1,377,000 \\\text { Variable costs } & 926,100 & 596,700 \\\text { Fixed costs } & \underline{500,000} & \underline{ 500,000} \\ \text { Net income } & \underline{ \underline{ 463,900 }}& \underline{ \underline{ 280,300}} \\ \text { Units } & 252,000 & 108,000\end{array}$
At the end of the year, the total fixed costs and the variable costs per unit were exactly as budgeted, but the following units per product line were sold. Trend, Inc. analyzes the effects its sales variances have on the profitability of the company.
$$\begin{array} { c c c } \text { Product Lines } & \text { Units } & \text { Sales } \\\text { A } & 2 5 3 , 2 3 0 & \$ 1 , 8 4 8 , 5 7 9 \\\text { B } & 113,77 0& \$ 1 , 4 7 9 , 0 1 0 \end{array}$$
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What is the total sales mix variance?

• A) $12,478.00.
• B) $20,815.00.
• C) $33,915.00.
• D) $40,553.50.

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Definitions:

Depreciable Amount

The cost of an asset, or other amount substituted for cost, less its residual value.

Residual Value

The estimated amount that an asset will realize upon its disposal at the end of its useful life after deducting expected costs of disposal.

Annual Depreciation

The portion of the cost of a fixed asset that is expensed each year over its useful life as a way to allocate the cost over time.

Useful Life

The estimated period that an asset is expected to be usable for the purpose for which it was acquired, affecting its depreciation or amortization.