Sales variances are the differences between actual sales and the expected or budgeted sales.
GET PDF of fully solved assignment MCO-05 or any other by click above. You can order any subject ignou solved assignments pdf, ignou handwritten assignments pdf or ignou Handwritten Assignments hard copy from above link.
These variances can arise due to various reasons, such as changes in market conditions, fluctuations in demand, pricing decisions, changes in the product mix, etc. Analyzing sales variances is important as it helps to identify the underlying causes of the variance and take corrective actions to improve future sales performance.
Here are some ways to analyze sales variances in detail:
- Sales Volume Variance: The sales volume variance measures the difference between the actual sales volume and the budgeted sales volume, assuming no change in the selling price. A positive sales volume variance indicates that the actual sales volume was higher than the budgeted sales volume, while a negative sales volume variance indicates that the actual sales volume was lower than the budgeted sales volume. This variance can be analyzed by examining the changes in market conditions, competition, demand, and the effectiveness of the sales team.
- Sales Price Variance: The sales price variance measures the difference between the actual selling price and the budgeted selling price, assuming no change in the sales volume. A positive sales price variance indicates that the actual selling price was higher than the budgeted selling price, while a negative sales price variance indicates that the actual selling price was lower than the budgeted selling price. This variance can be analyzed by examining the changes in pricing strategy, competitive pricing, and the product mix.
- Sales Mix Variance: The sales mix variance measures the difference between the actual sales mix and the budgeted sales mix. A positive sales mix variance indicates that the actual product mix was more profitable than the budgeted product mix, while a negative sales mix variance indicates that the actual product mix was less profitable than the budgeted product mix. This variance can be analyzed by examining the changes in the product mix, customer preferences, and sales team performance.