If two products are close substitutes,the sales volume variance for each product can be split into a sales quantity variance and a sales mix variance.

Question

Quizplus · Accepted Answer

When two products are close substitutes, customers may switch between them, causing changes in sales quantities and sales mix. Therefore, the sales volume variance for each product can be split into a sales quantity variance (caused by changes in the number of units sold) and a sales mix variance (caused by changes in the proportion of each product sold).

If Two Products Are Close Substitutes,the Sales Volume Variance for Each