In standard costing systems, the direct materials mix variance is part of the direct materials usage variance. It represents the difference between the total material used in standard proportions (standard mix) and the material used in actual proportions, valued at standard prices (standard purchase price and standard selling price).
The Sales Margin Mix Variance (Sales Mix Profit Variance) in standard costing measures the financial impact of changes in the actual mix of sales compared to the standard or budgeted sales mix. It isolates the portion of the sales volume variance attributable to variations in the product mix.
Standard Mix refers to the predetermined proportions set for the use of different materials in the manufacturing process or the budgeted total volume of sales expressed in proportions of a range of related products. This helps in calculating various variances such as direct materials mix variance, direct materials yield variance, sales margin mix variance, and sales margin yield variance.
