W6 - Sales Variance LEARN ALL Flashcards
Sales volume variance
(Actual sales volume - Budgeted sales volume) x Standard Profit
Standard profit = Standard selling price - Standard cost per unit
Sales price variance
(Actual Selling Price − Budgeted Selling price) × Actual Sales Volume
Sales Volume - Further split
Sales volume variance can also be split into two further variances:
- Quantity
- Mix
Sales Mix Variance def. and formula
It indicates the effect on profit of changing the mix of actual sales from the standard mix.
(Actual sales vol. x Average prof. per unit in actual mix) - (Actual sales vol. Average prof. per unit in standard mix)
Sales Quantity variance def. and formula
It indicates the effect on profit of changing the total amount sold from the budget (valued at average contribution per unit).
(Actual sales vol. x Average prof. per unit in standard mix) - (Budgeted sales vol. x Average prof. per unit in standard mix)
Sales Quantity Variance split
Market share variance
Market size variance
Market size variance
[(Budgeted market share x Actual Market Size) -Budgeted Sales Volume] x
Standard Contribution per unit
Budgeted sales vol = Budgeted market share x Budget market size
Market Share Variance
[Actual sales vol. - (Budgeted market share x Actual market size)] x Standard contribution per unit
Actual sales vol = Actual market share x actual market size