Sales variances may be computed in a manner similar to cost variances-that is, computing both price and volume variances.

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Sales variances can be computed by analyzing the difference between actual sales revenue and the planned or budgeted sales revenue. Similar to cost variances, sales variances can be broken down into price and volume variances. The price variance is the difference between the actual selling price and the planned selling price, while the volume variance is the difference between the actual sales volume and the planned sales volume.

Sales Variances May Be Computed in a Manner Similar to Cost