Once Again: The Volume-Mix-Price/Cost Budget Variance Analysis.

Abstract The article provides a brief comparison of the methods of profit analysis in two countries, the U.S. and Soviet Union. The calculation of the volume variances depends in the first place upon the dimension of the volume of sales. Volume of sales can be expressed in two main ways: in physical units of products, and in summarized money estimation. Mix variance analysis has a close connection with volume variance analysis. The majority of authors use the same methodology in mix variance analysis. Differences in results depend on the way sales volume is measured. The characteristic features of the approach by American accountants is the calculation of mix variances on the whole volume of sales without detailing them in terms of products or product lines. But the Soviet approach to the calculation of mix variances for each product differs from approaches suggested in American accounting literature. Soviet accountants proceed from the assumption that the mix of sales influences the profit only in the case where the percentage of the profit on the unit of volume differs from the average.