Sales Mix and Quantity Variances
AAA Electronics sells two models of electronic organizers. The budgeted price per unit for the regular model is $109.50 and the budgeted price per unit for the wireless model is $249.50. The master budget called for sales of 20,000 regular models and 9,000 wireless models during the current year. Actual results showed sales of 15,000 regular models, with a price of $112.90 per unit, and 10,000 wireless models, with a price of $253.90 per unit. The standard variable cost per unit is $50 for a regular model and $100 for a wireless model.
Required
a. Compute the activity variance for these data.
b. Break down the activity variance into mix and quantity parts.