Question
In: Accounting
A firm has two types of sales for one product: online and mail order. The firm...
A firm has two types of sales for one product: online and mail order. The firm understands these two types of sales to be substitutable. The firm's standard mix is 2 online sale(s) for every 7 mail order sale(s).
- Online sales bring in $20 each
- Mail order sales bring $5 each
The firm's actual sales were 10,000 total units with 4,000 online sale(s) and 6,000 mail order sale(s).
What is the firm's mix variance for sales? Round final answer to nearest cent
Solutions
Expert Solution
| Actual Sales In Standard Mix | ||||||
| Units | Revenue per unit | Total Revenue | ||||
| Online | =10000 units/9*2 | 2222.22 | $ 20 | $ 44,444.44 | ||
| Sale Order | =10000 units /9*7 | 7777.78 | $ 5 | $ 38,888.89 | ||
| Total | 10000.00 | $ 83,333.33 | ||||
| Actual Sales Revenue | ||||||
| Units | Revenue per unit | Total Revenue | ||||
| Online | 4000 | $ 20 | $ 80,000.00 | |||
| Sale Order | 6000 | $ 5 | $ 30,000.00 | |||
| Total | $ 110,000.00 | |||||
| Sale Mix Variace = $110000-83333.33 | ||||||
| = | $ 26,666.67 | (favorable) | ||||
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