Answer the Following Questions Using the Information Below:
the Fortise

question 133

Multiple Choice

Answer the following questions using the information below:
The Fortise Corporation manufactures two types of vacuum cleaners, the Victor for commercial building use and the House-Mate for residences. Budgeted and actual operating data for the year 2015 were as follows:
$$\begin{array}{l}\begin{array} { l r r r } \text { Static Budget } & \text { Victor } & \text { House-Mate } & \text { Total } \\\hline \text { Number sold } & 6,000 & 24,000 & 30,000\\\text { Contribution margin } &\$ 1,560,000 & \$ 3,120,000 &\$ 4,680,000\\\\\text { Actual Results } & \text { Victor } & \text { House-Mate } & \text { Total } \\\text { Number sold } & 5,000 & 35,000 & 40,000 \\\text { Contribution margin } & \$ 1,400,000 & \$ 4,130,000 & \$ 5,530,000\end{array}\end{array}$$
-What is the total sales-mix variance in terms of the contribution margin?

• A) $200,000 unfavorable
• B) $390,000 unfavorable
• C) $900,000 favorable
• D) $1,260,000 favorable

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Definitions:

Investing Transactions

Financial activities related to the purchase or sale of long-term assets and investment securities.

Loss on Sale

The financial loss incurred when an asset is sold for less than its carrying amount on the balance sheet.

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for the effects of non-cash transactions and changes in working capital.

Cash Provided

The funds generated by a company, including revenues from its operations and any additional cash received.