Sales price variance
In one sentenceThe effect of selling a unit at a price different from the price estimated in the budget, calculated on the quantity actually sold.
Simply put
This variance isolates the effect of price alone: you assume you sold the same actual quantity, and ask how much you gained or lost because the price changed.
In sales, an increase is favorable: selling at a price higher than estimated is a favorable variance, and extra discounts create an unfavorable variance.
Worked example
A confectionery factory estimated the price of a box at 100 SAR and sold 1,000 boxes at 105 SAR.
Quantity actually sold1,000 boxes
Actual price − Estimated price105 − 100 = 5 SAR
Variance = 5 × 1,000 (favorable)5,000 SAR
Formula: (Actual selling price − Estimated selling price) × Quantity actually sold
Don't confuse it with
Sales volume varianceIt measures the effect of selling more or fewer units than estimated, assuming the estimated price.