Question

Which of the following statements is true regarding mix variance?

a.It shows the impact of different costs of inputs used on the input proportions.
b.It is the difference between the actual amount of each input and its standard mix amount.
c.It shows the difference between the amount of output that was produced versus the expected output for a given amount of input.
d.It is the difference in the standard cost of the actual mix of inputs used and the standard cost of the mix of inputs that should have been used.

Answer 1

The true statement about mix variance is that it represents the difference in the standard cost of the actual mix of inputs used and the standard cost of the expected mix of inputs.

Step-by-step explanation:

The statement that is true regarding mix variance is d. It is the difference in the standard cost of the actual mix of inputs used and the standard cost of the mix of inputs that should have been used. Mix variance is used in cost accounting to help businesses understand the financial impact of deviations in the mix of materials or labor used in the production process from the standard or planned mix. If a different mix of inputs resulted in higher or lower costs than expected, this variance helps identify and quantify that effect.