Problem - Beta Division of Gotham Industries, Inc., makes three products. Last month's budgeted and actual sales and margins for these products were as follows:
|
Budget
|
Actual
|
|
|
Unit Sales
|
Unit Margin
|
Unit Sales
|
Unit Margin
|
|
Product 1
|
3,200
|
$10.00
|
2,850
|
$10.20
|
|
Product 2
|
1,700
|
13.00
|
2,500
|
12.58
|
|
Product 3
|
5,100
|
9.00
|
4,250
|
8.8
|
|
10,000
|
$32.00
|
9,600
|
$31.58
|
Question:
1. Determine the gross margin mix, selling price, and sales volume variances for each product.
2. Calculate the net gross margin variance directly; then as a check see if it equals the sum of the three variance components you calculated individually in question #1 for each product.