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Can you describe briefly the situations that help you to explain a favourable sales volume variance ?

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Question added by Nadjib RABAHI , Freelancer , My own account
Date Posted: 2016/02/17
Farooq Idrees
by Farooq Idrees , Senior Business Partner- Consulting , Al Riada Consulting & Auditing

A favorable sales volume variance can be a result if some specific measures and not necessarily one but a combination as well.

The company has outdone its volume in sales which might suggest that the budgeted volume was not the correct assumption at the time or the budgeted price per unit had been revised i.e decreased to give the volume a boost , as the price reduction would have triggered this increase.

Another factor might be the seasonality of the product like the sales of cardigans in cold weather. It can also be the result of a marketing campaign launched by the company which has made its products more visible or the retailers have been revamped so that it is more accessible now.

Last but not the least, that minor enhancements have made you stand out or the competitor has just ceased trading.

 

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