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Business Definition for: sales price variance
Dictionary of Accounting Terms
sales price variance

difference between actual selling price per unit and the budgeted selling price per unit, multiplied by the actual number of units sold.

Sales Price Variance = (Actual Price-Budgeted Price) ×Actual Sales

If the actual price is greater than the budgeted price, a variance is favorable; otherwise, it is unfavorable.

See also sales volume variance
Related Terms:
sales volume variance

difference between the actual number of units sold and the budgeted number, multiplied by the budgeted selling price per unit; also called sales quantity variance.

Sales Price Variance = (Actual Sales - Budgeted Sales) ×Budgeted Price

If the actual sales are greater than the budgeted sales, a variance is favorable; otherwise, it is unfavorable. For example, ABC Shops sold 50,000 units of product A for $21 each, in comparison with the budgeted 60,000 units at $22. The sales volume variance is (60,000 - 50,000) x $22 = $220,000. Since the actual sales were lower than the budgeted sales, the sales volume variance is unfavorable.

Referring Terms:
price variance
profit variance
sales volume variance
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