Detailed Answer
Answer (C) is correct.
The sales volume variance can be divided into the sales quantity variance
and the sales mix variance. The sales quantity variance is the change in
contribution margin caused by the difference between actual and
budgeted volume, assuming that budgeted sales mix, unit variable costs,
and unit sales prices are constant. Thus, it equals the sales volume
variance when the sales mix variance is zero. In a multiproduct firm, the
sales mix variance is a variance caused by a sales mix that differs from
that budgeted. For example, even when the sales quantity is exactly as
budgeted, an unfavorable sales mix variance can be caused by greater
sales of a low-contribution product at the expense of lower sales of a
high-contribution product.