Sales-mix variance

Sales-mix variance is the portion of the sales-volume variance caused by selling products in different proportions from budget, holding total units sold constant. A shift toward higher-margin products produces a favourable variance.

ByHoang TruongUpdated June 30, 2026

FrameworkStandard costing and variance analysis

See it move

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Budgeted mix was 60% Product A at €20 contribution and 40% Product B at €10, or 600 and 400 units out of 1,000. Actually, 700 units of A and 300 of B were sold — still 1,000 units in total, but shifted toward the higher-contribution product. That shift alone produces a favourable sales-mix variance.

Where it fits

SubjectManagerial AccountingAdvancedTopicStandard Costing & Variance AnalysisAdvanced

The formula

LaTeX

SMV = \sum_i \left[(AQ_{A,i} - AQ_{B,i}) \times SC_i\right]

Variables

$A Q_{A}, i$: Actual units of product i sold (actual mix)
$A Q_{B}, i$: Actual total units sold reallocated to product i at the budgeted mix proportion
$S C_{i}$: Standard contribution per unit of product i (€ per unit)

Favourable when actual mix shifts toward higher-margin products; total actual volume is held constant so only the mix shift is measured