1. and 2. Solution Exhibit 14-24 presents the sales-volume, sales-quantity, and sales-mix
variances for the Plain and Chic wine glasses and in total for Jinwa Corporation in June 2006.
The steps to fill in the numbers in Solution Exhibit 14-24 follow:
Step 1
Consider the static budget column (Column 3):
Static budget total contribution margin
$5,600
Budgeted units of all glasses to be sold
2,000
Budgeted contribution margin per unit of Plain
$2
Budgeted contribution margin per unit of Chic
$6
Suppose that the budgeted sales-mix percentage of Plain is y. Then the budgeted sales-
mix percentage of Chic is (1
–
y).
Therefore,
(2,000y
$2) + (2,000
(1
–
y)
$6)
=
$5,600
$4000y + $12,000
–
$12,000y
=
$5,600
$8,000y
=
$6,400
y
=
0.8 or 80%
1
–
y
=
20%
Jinwa
’
s budgeted sales mix is 80% of Plain and 20% of Chic. We can then fill in all the numbers
in Column 3.
Step 2
Next, consider Column 2 of Solution Exhibit 14-24.
The total of Column 2 in Panel C is $4,200 (the static budget total contribution margin of
$5,600
–
the total sales-quantity variance of $1,400 U which was given in the problem).
We need to find the actual units sold of all glasses, which we denote by q. From Column
2, we know that
(q
0.8
$2) + (q
0.2
$6)
=
$4,200
$1.6q + $1.2q
= $4,200
$2.8q
= $4,200
q
=
1,500 units
So, the total quantity of all glasses sold is 1,500 units. This computation allows us to fill in all the
numbers in Column 2.

14-18
Step 3
Next, consider Column 1 of Solution Exhibit 14-24. We know actual units sold of all glasses
(1,500 units), the actual sales-mix percentage (given in the problem information as Plain, 60%;
Chic, 40%), and the budgeted unit contribution margin of each product (Plain, $2; Chic, $6). We
can therefore determine all the numbers in Column 1.
Solution Exhibit 14-24 displays the following sales-quantity, sales-mix, and sales-volume
variances:
Sales-Volume Variance
Plain
$1,400 U
Chic
1,200
All Glasses
$
200
Sales-Mix Variances
Sales-Quantity Variances
Plain
$
600 U
Plain
$
Chic
1,800
F
Chic
600
All Glasses
$1,200
F
All Glasses
$1,400
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.
F
U
800 U
U
U

14-19
SOLUTION EXHIBIT 14-24
Columnar Presentation of Sales-Volume, Sales-Quantity and Sales-Mix Variances
for Jinwa Corporation
Flexible Budget:
Actual Units
of All Glasses Sold
Actual Sales Mix
Budgeted
Contribution
Margin per Unit
Actual Units
of All Glasses Sold
Budgeted Sales Mix
Budgeted
Contribution
Margin per Unit
Static Budget:
Budgeted Units
of All Glasses Sold
Budgeted Sales Mix
Budgeted
Contribution
Margin per Unit
Panel A:
Plain
(1,500
0.6)
$2
900
$2
(1,500
0.8)
$2
1,200
$2
(2,000
0.8)
$2
1,600
$2
$1,800
$2,400
$3,200
$600 U
$800 U
Sales-mix variance
Sales-quantity variance
$1,400 U
Sales-volume variance
Panel B:
Chic
(1,500
0.4)
$6
600
$6
(1,500
0.2)
$6
300
$6
(2,000
0.2)
$6
400
$6
$3,600
$1,800
$2,400
$1,800 F
$600 U
Sales-mix variance
Sales-quantity variance
$1,200 F
Sales-volume variance
Panel C:
All Glasses
$5,400
$4,200
$5,600
$1,200 F
$1,400 U