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:

Temporary Investments

Short-term investments made by a company in securities that can be easily converted into cash, typically held for a year or less.

Market Price

The current market price for acquiring or disposing of an asset or service.

Interest Revenue

Income earned from investments, loans, or other financial instruments that pay interest, contributing to a company's total revenue.

Dividends

Payments made out of a company's earnings to its shareholders, based on the number of shares held.