Page 107 - P1 Integrated Workbook STUDENT 2018

Variance analysis

2.2 Causes of sales variances

Sales price

 Higher than expected discounts offered to customers to persuade them to
buy, or due to purchasing in bulk.

 Lower than expected discounts, perhaps due to strength of sales demand.

 The effect of low price offers during a marketing campaign.

 Market conditions forcing an industrywide price change.

 Changes to product quality or design.

Sales volume

 Successful or unsuccessful direct selling efforts.

 Successful or unsuccessful marketing efforts.

 Unexpected changes in customer needs and buying habits.

 Failure to satisfy demand due to production difficulties.

 Higher demand due to a cut in selling prices, or lower demand due to an
increase in sales prices.

 Changes to the level or nature of competition.

 Changes to product quality or design.

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