Professional Documents
Culture Documents
Sales Variance
Sales Variance
comparison between the actual sales & budgeted sales. The formula is:
Budgeted Sales – Actual Sales
Two sub-variances constitute this basic variance, viz., (a) sales price
variance, & (b) sales volume variance.
Sales Price Variance: The comparison between actual sales value & actual sales at
standard values is done by Sales Price variance. The formula is:
Actual Sales – Standard Sales
Sales Volume Variance: The comparison between budgeted sales & actual sales at
standard values are done by Sales Volume variance. The formula is:
Budgeted Sales – Standard Sales
The sales volume variance can be sub-divided into two components (a) sales
Mix variance & (b) sales quantity variance, when sale of more than one
product is made.
Sales Mix Variance: The effect of variations from the planned sales mixture is
shown by the sales mix variance.
Or, Standard price per unit * (Actual quantity at actual mix – Actual quantity
at standard mix)
The effect of the unit volume which varies from the budget is revealed by
the sales quantity variance.
Or, Standard price per unit * (Actual quantity at standard mix – Budgeted quantity
at standard mix)