F5-PM (note for revision)

Question 1

Explain what each of the sale mix contribution variance and sales quantity contribution variance measures

Answer 1

1. The sale mix contribution variances measures the actual mix (AM) and the standard mix (SM) at the standard contribution to find out fi company sold more or less of the individual most profitable product than it originally expected.
2. The sales quantity contribution variances measures the total actual quantity (AQ) sold and standard quantity (SQ) sold to find out if company sold more or less total quantity than expected.