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Item 2

Exercise 17-27 (Static) Sales Mix and Quantity Variances (LO 17-4)

Saras Systems manufactures audio systems for cars. Two models are produced: The Standard model has a budgeted price of $200 and a standard variable cost of $80. The Blaster model has a budgeted price of $480 and a standard variable cost of $160. At the beginning of the year, Sara estimated that she would sell 7,500 Blaster models and 22,500 Standard models. The actual results for the year showed that 7,200 Blaster models were sold for total revenues of $3,024,000. A total of 26,400 Standard models were sold for revenues of $5,544,000.

Required: a. Compute the activity variance for the year. b. Compute the mix and quantity variances for the year.

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Compute the activity variance for the year. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

Activity variance

• Required A
• Required B