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:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a specific period.

Cost of Goods Sold

The direct costs attributable to the production of goods sold in a company, including materials and labor.

Average Inventory

A measure used to estimate the value of inventory over a certain period by averaging the beginning and ending inventory.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, crucial for calculating cost of goods sold.