An Unfavorable Sales-Mix Variance Would Most Likely Be Caused by Which

question 8

Multiple Choice

An unfavorable sales-mix variance would most likely be caused by which of the following?

• A) a new competitor providing better service in the high-margin product sector
• B) a competitor having distribution problems with high-margin products
• C) the company offering low-margin products at a higher price
• D) the company experiencing quality-control problems that get negative media coverage of low-margin products

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Definitions:

IFRS

A collection of accounting norms formulated by the International Accounting Standards Board (IASB), known as International Financial Reporting Standards, which are increasingly being adopted worldwide for the creation of financial statements for public companies.

Development Expenditures

Costs incurred in the research and development of new products or services, which are often capitalized and amortized over time.

Expected Benefit Approach

A method used in accounting for pensions that allocates the cost of pensions over the years during which employees earn their pension benefits.

Discounted Present Value

A valuation method that calculates the current worth of a future cash flow, taking into account the time value of money.