diff --git a/plugins/woocommerce/changelog/49244-fix-37940-remove-simple-products-from-variation-report b/plugins/woocommerce/changelog/49244-fix-37940-remove-simple-products-from-variation-report
new file mode 100644
index 00000000000..b838c1ee429
--- /dev/null
+++ b/plugins/woocommerce/changelog/49244-fix-37940-remove-simple-products-from-variation-report
@@ -0,0 +1,4 @@
+Significance: minor
+Type: fix
+
+Exclude simple products from variations reports by default.
\ No newline at end of file
diff --git a/plugins/woocommerce/src/Admin/API/Reports/Variations/DataStore.php b/plugins/woocommerce/src/Admin/API/Reports/Variations/DataStore.php
index 6b84a8c216d..ddcb6e048bf 100644
--- a/plugins/woocommerce/src/Admin/API/Reports/Variations/DataStore.php
+++ b/plugins/woocommerce/src/Admin/API/Reports/Variations/DataStore.php
@@ -179,10 +179,8 @@ class DataStore extends ReportsDataStore implements DataStoreInterface {
 
 		if ( $included_variations ) {
 			$this->subquery->add_sql_clause( 'where', "AND {$order_product_lookup_table}.variation_id IN ({$included_variations})" );
-		} elseif ( ! $included_products ) {
-			if ( $this->should_exclude_simple_products( $query_args ) ) {
-				$this->subquery->add_sql_clause( 'where', "AND {$order_product_lookup_table}.variation_id != 0" );
-			}
+		} elseif ( $this->should_exclude_simple_products( $query_args ) ) {
+			$this->subquery->add_sql_clause( 'where', "AND {$order_product_lookup_table}.variation_id != 0" );
 		}
 
 		$order_status_filter = $this->get_status_subquery( $query_args );
diff --git a/plugins/woocommerce/tests/legacy/unit-tests/woocommerce-admin/api/reports-variations.php b/plugins/woocommerce/tests/legacy/unit-tests/woocommerce-admin/api/reports-variations.php
index 499f2f3293e..d8906331c79 100644
--- a/plugins/woocommerce/tests/legacy/unit-tests/woocommerce-admin/api/reports-variations.php
+++ b/plugins/woocommerce/tests/legacy/unit-tests/woocommerce-admin/api/reports-variations.php
@@ -88,6 +88,35 @@ class WC_Admin_Tests_API_Reports_Variations extends WC_REST_Unit_Test_Case {
 		$this->assertArrayHasKey( 'variation', $variation_report['_links'] );
 	}
 
+	/**
+	 * Test to confirm that simple products are excluded from the variations reports by default
+	 */
+	public function test_simple_products_excluded_from_variations_reports_by_default() {
+		wp_set_current_user( $this->user );
+		WC_Helper_Reports::reset_stats_dbs();
+
+		$simple_product = WC_Helper_Product::create_simple_product();
+
+		$order = WC_Helper_Order::create_order( 1, $simple_product );
+		$order->set_status( 'completed' );
+		$order->set_total( 15 );
+		$order->save();
+
+		WC_Helper_Queue::run_all_pending();
+
+		$request = new WP_REST_Request( 'GET', $this->endpoint );
+		$request->set_query_params(
+			array(
+				'product_includes' => $simple_product->get_id(),
+			)
+		);
+		$response = $this->server->dispatch( $request );
+		$reports  = $response->get_data();
+
+		$this->assertEquals( 200, $response->get_status() );
+		$this->assertEquals( 0, count( $reports ) );
+	}
+
 	/**
 	 * Test getting reports with the `variations` param.
 	 *