Solution Exhibit 14-23 displays the following sales-quantity, sales-mix, and sales-volume variances:
All Glasses U
Plain$ 600 UPlain$ 800 U
Chic FChic U
All Glasses FAll Glasses U
3.Jinwa Corporation shows an unfavorable sales-quantity variance because it sold fewer wine glasses in total than was budgeted. This unfavorable sales-quantity variance is partially offset by a favorable sales-mix variance because the actual mix of wine glasses sold has shifted in favor of the higher contribution margin Chic wine glasses. The problem illustrates how failure to achieve the budgeted market penetration can have negative effects on operating income.