Hi, This variance is part of a series of variances evaluating sales performance. The three main factors are (1) selling price, (2) sales mix as a percent of total units sold, and (3) units sold. The variances then compare the actual items with the standards (or budgeted) amounts for those items. So, you can see in the formula above, the sales mix variance, that the only item changing is the value of mix.
In any case, since these measure revenue amounts, not costs amounts as most other variances measure, any 'movement' toward actual that results in higher numbers are Favorable. So, this is definitely a favorable mix variance. Most other variances (materials, labor, overhead, etc.) are cost variances. Anytime those actual amounts are higher than the standards, they are indeed unfavorable.
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Jeanne David
Academic
University of Detroit Mercy
Farmington Hills MI
United States
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Original Message:
Sent: 01-03-2019 01:13 PM
From: Luis Boggiano
Subject: Mix Variances
Can anyone explain why the following Mix Variance is favorable (Gleim example SU 7):
AQxS%xSP=$58.212
AQxA%xSP=$58.860
Mix Variance=$648 F?
If the Mix was budgeted to cost $58.212 and the Mix actual cost was $58.860 how can the difference of $648 be favorably?
Am I interpreting the results correctly?
Thanks.