All 38 Variance Analysis questions
More in Variance Analysis
What is a standard cost? What is a standard hour and how is it used in efficiency measurement? What is the total cost variance and how does it relate to the sub-variances? What is a standard costing system? What is a favorable variance a warning sign of sometimes? What is the difference between a budget and a standard? What are the two components of the direct materials variance? What are the two components of the direct labor variance? How is the variable overhead variance analyzed? What are the sales variances (price and volume)?
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Budgeting & Forecasting › Variance Analysis

What does an adverse sales price variance indicate?

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Answer

An adverse sales price variance means products were sold at a lower average price than the standard/budgeted price, reducing revenue and profit. Causes include discounting to win business, competitive pressure, or an unfavorable product/customer mix. It's calculated as (actual price - standard price) x actual units sold.
Real-world example Heavy discounting to hit volume targets produces an adverse sales price variance.

Common follow-ups: What causes it? | How is it calculated?

Flexible Budgets The Budgeting Process Variance Analysis
All 38 Variance Analysis questions