Sales-quantity variance
Sales-quantity variance is the portion of the sales-volume variance caused by total units sold differing from budget, holding the budgeted mix constant. Together with the sales-mix variance, it fully explains the volume effect on profit.
FrameworkStandard costing and variance analysis
What it is
See it move
At the budgeted mix, 1,000 units would earn a weighted-average contribution of €16 each, or €16,000 in total. Because 1,200 units were actually sold, a favourable sales-quantity variance of €3,200 lifts that figure to €19,200. The mix is held constant throughout, so this €3,200 gain reflects total volume alone, before any mix effect is considered.
The formula
Variables
- Actual total units sold across all products
- Budgeted total units across all products
- Budgeted weighted-average standard contribution per unit, weighted by the budgeted mix proportions (€ per unit)
Favourable when actual total volume exceeds budget; the budgeted mix is held constant so only the volume effect on profit is measured