Sales Variances

Sales Variances

1. Total Sales Variance

   • Difference between actual sales unit x actual profit and budgeted units x budgeted profit (Actual Sales units x Actual Profit per unit) - (Budgeted Sales units x Standard Profit per unit)
     • Sales Volume Variance
       • Difference between the actual units sold and the budgeted units valued at Standard Profit Margin (Actual Units - Budgeted Units) x Standard Profit Margin
         • Sales Volume Planning Variance
           • Difference between the budgeted units and the revised budgeted units (based on revised market share) valued at Standard Profit Margin (Budgeted Units - Revised Budgeted Units) x Standard Profit Margin
         • Sales Volume Operational Variance
           • Difference between the revised budgeted units (based on revised market share) and the actual units valued at Standard Profit Margin (Revised Budgeted Units - Actual Units) x Standard Profit Margin
     • Sales Price Variance
       • Difference between actual sales revenue and what sales revenue should have been for the actual sales units (Actual Sales units x Actual Selling Price per unit) - (Actual Sales units x Budgeted Selling Price per unit) OR ASU x (ASP-BSP)
         • Sales Price Operational Variance
           • Difference between the revised should have been for the actual sales units and actual sales revenue (Actual Sales units x Revised Budgeted Selling Price per unit) - Actual (Actual Sales units x Actual Selling Price per unit) OR ASU x (RBSP-ASP)
         • Sales Price Planning Variance
           • Difference between what sales revenue should have been for the actual sales units and the revised should have been for the actual sales units (Actual Sales units x Budgeted Selling Price per unit) - (Actual Sales units x Revised Budgeted Selling Price per unit) OR ASU x (BSP-RBSP)

2. ASU = Actual Sales Units, ASP = Actual Selling Price, BSP = Budgeted Selling Price, RBSP = Revised Budgeted Selling Price