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
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| ACCA | PM | Supporting | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |
