Sales mix variance
The sales mix variance measures the profit or contribution effect of actual products sold in proportions different from the budget mix, holding actual total sales units constant. Recalculate the actual total using budget proportions, then compare actual product units with those revised quantities at standard unit contribution or profit as required. It does not measure the overall change in sales quantity and should reconcile with the separate sales quantity variance.
Worked example
Budget mix A:B is 60:40 with standard contributions $5 and $8. Actual 100 units split 50/50. Mix effect is (50−60)×$5 + (50−40)×$8 = $30 favourable.
Common mistake
A favourable mix means a move toward higher standard profit or contribution, not necessarily a rise in sales revenue or total units.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | PM | Direct | September 2026–June 2027 |