Points to stress If there is a nonzero SMV, at least one product must have an F variance and at least one product must have a U variance. The SMV cannot be F for all products or U for all products. Actual prices are used in variance analysis only in calculating the FBV. Actual prices are not used in calculating the SVV or any of its components. Thus, we use budgeted (rather than actual) selling price when calculating the SMV. Note that many alternative formulae are found in practice. Advise students that they should always examine the specific formula when interpreting reported sales-mix variances.
