How to calculate sales profit variance
Business/Management
ScanSolve AI Answer
Answer
Sales profit variance is calculated by finding the difference between the actual profit and the budgeted profit.
Step-by-step solution
3 stepsDetermine the actual profit.
This is the revenue earned minus the actual costs incurred.
Determine the budgeted profit.
This is the projected revenue minus the projected costs.
Subtract the budgeted profit from the actual profit.
A positive variance indicates that the actual profit was higher than budgeted, while a negative variance indicates that the actual profit was lower than budgeted.
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