Sales price effect
The sales price effect represents that part of a revenue variance that is caused by sales price changes.
If the sales price changes and the sales volume is maintained , increases in sales (apart from structural effects ) are solely due to price changes. If the sales price remains unchanged and the amount sold varies, one speaks of the volume effect .
calculation
- Selling_price_period1 = 30 €; Quantity_period1 = 2
- Sales price_period2 = 60 €; Quantity_period2 = 2
If you compare the two revenues , the change in sales price is the cause. ($ 60 × 2) - ($ 30 × 2) = $ 60. The change in sales (€ 60) was brought about by doubling the sales price.
- Sales price effect = quantity_period2 × (sales price_period2 - sales price_period1)
The use of a formula is indispensable because when analyzing thousands of products / articles / sales units, it helps to find a quick solution with the help of a spreadsheet program . The calculation formula is used for each article / product, since an application for all articles only shows the weighted average price.
scope of application
The sales price effect is increasingly being calculated to control sales activities in order to make the cause of changes in sales or the delimitation of sales price and volume effects transparent. The investigation of revenue variances is therefore a controlling instrument . Here, the focus can also be on deviations between planned and actual revenue. In addition, the analysis is not only located on the sales side - purchase quantities and prices are also considered here.
Bibliography
- Dellmann, Klaus / Pedell, Karl-Ludwig (1994): Controlling productivity, profitability and results, ed. by K. Dellmann and K.-L. Pedell, Stuttgart 1994.
- Eschenbach, Rolf (1995): Controlling, ed. by R. Eschenbach, Stuttgart 1995.
- Preißner, Andreas (2005): Praxiswissen Controlling, 4th, completely revised edition 2005, Munich, Vienna.
- Schröder, Ernst (2003): Modernes Unternehmens-Controlling, 8th, revised and significantly expanded edition 2003, Ludwigshafen (Rhine).
- Steinle, Claus / Bruch, Heike (2003): Controlling, ed. by H. Bruch, 3rd, revised and expanded edition 2003, Stuttgart.