Sales Mix and Quantity Variances

NotesQuizPaper examCBE

Sales Variances

Where a company sells several different products that have different profit margins, the sales volume variance can be divided into a sales quantity (sometimes called a sales yield variance) and sales mix variance.

The quantity variance measures the effect of changes in physical volume on total profits.

The mix variance measures the impact arising from the actual sales mix being different from the budgeted sales mix.

The variances can be measured either in terms of contribution margins or profit margins.

NotesQuizPaper examCBE