Sales-volume variance

Sales-volume variance measures the effect on profit of selling more or fewer units than planned. It is the difference between actual and budgeted volume, multiplied by the standard contribution margin per unit.

Also known asvolume variance

ByHoang TruongUpdated June 30, 2026

FrameworkFlexible budgeting

See it move

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A waterfall chart opens at the static budget contribution margin of €20,000. A single rising bar, Volume gain, adds €3,000 — the product of 1,500 additional units sold and the standard contribution margin of €2 per unit — landing on a flexible budget contribution margin of €23,000. The visual isolates the sales-volume variance: the sole effect of selling more units than planned, evaluated at the standard margin rather than at any actual price or cost.

Where it fits

SubjectManagerial AccountingAdvancedTopicStandard Costing & Variance AnalysisAdvanced

The formula

LaTeX

\text{SVV} = (Q_{\text{actual}} - Q_{\text{budget}}) \times CM_{\text{std}}

Variables

$Q_{a} c t u a l$: Actual units sold
$Q_{b} u d g e t$: Budgeted units
$C M_{s} t d$: Standard contribution margin per unit (€/unit)

Positive = favourable (sold more than planned); negative = adverse.

Check yourself

PracticeCORE

A bakery budgeted to sell 10,000 loaves at a standard contribution margin of €2.00 per loaf. Actual sales were 9,200 loaves. What is the sales-volume variance and how should it be classified?

Select an answer to check your understanding.