The Statement Concerning the Product Mix Variance That Is True

question 55

Multiple Choice

The statement concerning the product mix variance that is true is:

• A) It provides an indication of changes in contribution margin caused by selling in a different product mix from the planned mix
• B) This variance is only relevant when the products involved are substitute products
• C) It is calculated as change in Average standard contribution margin x Actual unit volume
• D) All of the statements are true

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Definitions:

Prevention Cost

Expenses incurred to prevent defects in products or services, including costs associated with quality control measures and training.

Quality Training

Educational programs or sessions aimed at enhancing the skills and knowledge of employees to maintain or improve product or service quality.

Quality Costs

Expenses associated with preventing, detecting, and correcting defective work in products or services.

Quality Cost Report

A quality cost report compiles all expenses related to ensuring products or services meet quality standards, including prevention, appraisal, and failure costs.