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Sales price variance

The sales price variance measures the revenue effect of actual selling price differing from standard for the actual quantity sold. With favourable-positive convention, it is actual units sold × (actual price − standard price). Analyse products separately where prices differ. It can reflect discounts, market conditions, product mix or deliberate strategy, and should be considered with volume, contribution, quality and longer-term customer effects.

Worked example

Sell 1,000 units at $21 against standard $20. Price variance is $1,000 favourable, before any related change in volume or cost.

Common mistake

Do not use budgeted sales quantity in the price variance or assume a price rise improved total profit if demand fell sharply.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Direct September 2026–June 2027
ACCA PM Supporting September 2026–June 2027
FIA FMA Direct September 2026–June 2027