This revenue variance analysis template demonstrates how to use the column-based approach to calculate the three different types of revenue variance.
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Revenue Variance Analysis is used to measure differences between actual sales and expected sales based on sales volume metrics, sales mix metrics, and contribution margin calculations. Information obtained from Revenue Variance Analysis is important to organizations because it allows management to determine actual sales performance in relation to the perceived performance of the company for specific products. It helps businesses identify which products are performing better in the market. Overall, variance analysis helps management make better strategic and business-level decisions to maximize its profitability.
|Flexible Budget Variance (FBV)||Sales Mix Variance (SMV)||Sales Quantity Variance (SQV)|
|Difference between the actual contribution margin and the standard contribution with sales mix and sales volume held constant||Difference between the actual product mix and the standard product mix with sales volume and contribution margin held constant||Difference between the actual volume of sales and the standard (estimated) volume of sales with sales mix and contribution margin held constant|
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