ACCA Notes✏

When sales of various products are unrelated, the demand and price for each product will be considered separately to optimise profits. The budgeted sales mix has no significance. The sales price and volume variance calculated on a product-by-product basis should provide sufficient information for management to identify any products underperforming. Sales mix and quantity variances will not provide additional useful information. Analysing the sales volume variance into mix and quantity variances is only likely useful when sales of the various products are interrelated. The analysis may indicate that products are substitutes or complements. Similar products could be differentiated by package size or brand. In such situations, the mix of products may have been considered when the budget was prepared, and management will be interested in the sales mix and quantity variances.