Next year's budget for Canfield, Inc., a multi-product company, is given below:

\begin{array}{lcc}&\text { Product A } & \text { Product B }\\\text { Sales }&\$1,890,000&\$1,377,000 \\\text { Variable costs } &919,800&594,000\\\text { Fixed costs }& \underline{500,000}& \underline{500,000}\\\text {Net income } & \underline{\$470,200}& \underline{\$283,000} \\\text {Units}&252,000&108,000\\\end{array}

At the end of the year, the total fixed costs and the variable costs per unit were exactly as budgeted, but the following units per product line were sold. Canfield analyzes the effects its sales variances have on the profitability of the company.

\begin{array} { c c c } \text { Product Line } & \text { Units } & \text { Sales } \\\text { A } & 252,230 & \$ 1,848,579 \\\text { B } & 113,770& \$ 1,479,010\end{array}

Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the sales activity variance for each product.
b. Compute the sales mix variance for each product.
c. Compute the sales quantity variance for each product.

In a Standard Costing System, Overhead Is Applied to Production

Multiple Choice

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