![]() This price is set based upon the notion that the business will not only cover its costs but also make a reasonable profit. The companies set a certain sales price for each product and/or service delivered by them. ![]() (Actual price – Budgeted price) × Actual number of units sold Analysis (Actual number of units sold × Actual price) – (Actual number of units sold × Budgeted price) The sales price variance is computed by using the following simple formulas or equations: ![]() In other words we can say that the sales price variance is the difference occurred in the amount of sales revenue of a company due to a difference in the actual sales price and the budgeted or standard sales price of a company. It may be defined as the difference between the actual units sold at actual price and the actual units sold at budgeted or standard price. Sales price variance occurs when actual price at which a product is sold varies from the budgeted or standard price set by the company’s management.
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