More insight into the sales-volume variance can be gained by subdividing it into:
A)the market-share variance and the market-size variance.
B)a cost hierarchy.
C)the sales-mix variance and the sales-quantity variance.
D)the flexible-budget variance and the market-size variance.

Question

Quizplus · Accepted Answer

Subdividing the sales-volume variance into sales-mix variance and sales-quantity variance helps to understand the impact of changes in product mix and the volume of sales. A change in sales mix refers to a shift in the proportion of different products sold, whereas sales quantity variance measures the change in sales volume. Therefore, option C is the best choice. Option A is incorrect because it only subdivides the sales-volume variance based on the size of the market and the market share of the company. Option B is incorrect because Cost Hierarchy is not relevant to the sales-volume variance. Option D is incorrect because it does not break down the sales-volume variance in a meaningful way.

More Insight into the Sales-Volume Variance Can Be Gained by Subdividing