A Machine Distributor Sells Two Models,basic and Deluxe

question 24

Multiple Choice

A machine distributor sells two models,basic and deluxe.The following information relates to its master budget. Actual sales were 7,000 basic models and 2,800 deluxe models.The actual sales prices were the same as the budgeted sales prices for both models.What is the sales mix variance for the basic model?

• A)$256,000.
• B)$1,344,000.
• C)$1,600,000.
• D)$2,520,000.

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Definitions:

Rights Offering

A financial offering in which a company gives existing shareholders the right to buy additional shares at a discounted price before offering it to the public.

Underwriting Provision

A clause in financial agreements, especially in insurance and securities, where an underwriter commits to buy and resell a specific amount of securities or assumes financial risk for a fee.

Standby Underwriting Agreement

A contract where the underwriter commits to buy any shares not purchased by investors during an initial public offering (IPO) or secondary offering.

Unsubscribed Portion

That part of a new issue of securities not taken up or purchased by investors during an offering period.