When Will Be the Sales-Mix Variance Favourable

question 71

Multiple Choice

When will be the sales-mix variance favourable?
Variant question

• A)The actual sales mix shifts toward the less profitable units
• B)The actual contribution margin is greater than the static-budget contribution margin
• C)The composite unit for the actual mix is greater than for the budgeted mix
• D)Actual unit sales are less than budgeted unit sales

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Definitions:

Average Variable Cost (AVC)

The cost per unit produced that varies, found by dividing the total variable expenses by the amount of output generated.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good or service changes as production increases.

Average Total Cost (ATC)

The total cost of production divided by the total quantity produced, representing the per unit cost.

Total Cost

The complete amount of money spent on producing or purchasing goods and services, including both fixed and variable costs.