ACCA Applied Skills · Performance Management · Sales mix and quantity variances
Which statement about the sales quantity variance is correct?
The sales quantity variance shows the effect on profit or contribution of selling a different total number of units from budget, with the budgeted mix and standard margins held constant. Mix and price effects are reported separately.
- AIt measures the effect of selling a different total volume than budgeted, at the budgeted mix and standard marginsCorrect
- BIt measures the effect of selling at prices different from standard
- CIt measures the effect of a change in the proportions of products sold, holding total volume constant
- DIt measures the effect of variable cost changes on contribution
Explanation
The quantity variance isolates total volume difference, valued at budgeted mix and standard contribution. Price differences are the sales price variance, and proportion changes are the mix variance.
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