Sales variance is the difference between actual
sales
Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale.
The seller, or the provider of the goods or services, completes a sale in ...
and budgeted sales. It is used to measure the performance of a sales function, and/or analyze business results to better understand
market
Market is a term used to describe concepts such as:
*Market (economics), system in which parties engage in transactions according to supply and demand
*Market economy
*Marketplace, a physical marketplace or public market
Geography
*Märket, an ...
conditions.
There are two reasons actual sales can vary from planned sales: either the volume sold varied from the expected quantity, known as sales volume variance, or the price point at which units were sold differed from the expected price points, known as sales price variance. Both scenarios could also simultaneously contribute to the variance.
Sales volume variance
Sales volume variance can be considered favorable or unfavorable. Causes of sales volume variance include changes in competition and sales prices, changes in consumer desires (i.e. fashion trends over time), and impositions or removals of government trade restrictions.
Sales price variance
Sales price variance can be considered favorable or unfavorable. A product sold as a price higher than the previously predicted price is considered favorable sales price variance, whereas selling for a lower price than expected is considered unfavorable sales price variance.
References
{{retailing-stub