Selling Price Variance

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Definition: Selling Price Variance

Sales Price Variance is a measure of difference in sales revenue due to variation between the standard and the actual selling price. This metric is used to measure the performance of a sales function and analysing annual or quarterly business results in order to estimate market conditions.


It is calculated as follows:

Sales Price Variance= Quantity Sold* (Actual Selling Price-Standard Selling Price)


Sales Price Variance helps in determining whether a business would be profitable or loss making over a given period of time.

 

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