All 38 Variance Analysis questions
More in Variance Analysis
How do you decide which variances to investigate? What are the possible causes of an adverse material usage variance? What are the possible causes of an adverse labor efficiency variance? What are ideal, attainable, and basic standards? What is the sales quantity variance? What is the significance of controllable versus uncontrollable variances? How does the timing of the materials price variance calculation matter? How do you decide the significance of a variance statistically? What causes a favorable labour rate variance and an adverse one? How is the fixed overhead variance analyzed under absorption costing?
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Budgeting & Forecasting › Variance Analysis

What is the sales mix variance?

Intermediate

Answer

The sales mix variance measures the profit/contribution effect of selling products in different proportions than the budgeted mix, holding total volume constant. Selling relatively more high-margin products gives a favorable mix variance; more low-margin products, adverse. It's separated from the sales quantity variance.
Real-world example Selling a higher proportion of premium products than planned yields a favorable sales mix variance.

Common follow-ups: What does it hold constant? | How does it relate to the quantity variance?

Flexible Budgets Types of Budgets Variance Analysis
All 38 Variance Analysis questions