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. A period during which goods are sold for a reduced price may also be referred ...
and budgeted sales. It is used to measure the performance of a sales function, and/or analyze business results to better understand
market 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
A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...
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 at 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.
See also
*
Sales density
Sales density is a measure of performance in retailing. It is the revenue generated for a given area of sales space, and is presented as a monetary value per square metre. The higher the figure, the more efficiently the floorspace is being used.
References
External links
Door to Door Canvassing App
Management accounting
Sales
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