![]() This is not always true for the case of the variance. ![]() Recall that if X and Y are any two random variables, E(X + Y) E(X) + E(Y). We turn now to some general properties of the variance. If a product sells extremely well at its standard price, a company may even consider slightly raising the price, especially if other sellers are charging a higher unit price. If X is any random variable and c is any constant, then V(cX) c2V(X) and V(X + c) V(X). Variance measurements might occur monthly, quarterly or yearly, depending on individual business preferences. For example, a company may predict a set amount of sales for the next year and compare its predicted amount to the actual amount of sales revenue it receives. The sales price variance can reveal which products contribute the most to total sales revenue and shed insight on other products that may need to be reduced in price. Variance analysis is the comparison of predicted and actual outcomes. There are several formulae that can be used, depending on the situation. Unfavorable sales price variances, selling for less than the targeted price, can stem from increased competition, falling demand for a given product, or a price decrease mandated by some type of regulatory authority. A variance formula is an equation used to compute or define the variance.A favorable sales price variance means a company received a higher-than-expected selling price, often due to fewer competitors, aggressive sales and marketing campaigns, or improved product differentiation.It can be used to determine which products contribute most to the total sales revenue and shed insight on other products that may need to be reduced in price or discontinued.Sales price variance refers to the difference between a business's expected price of a product or service and its actual sales price.
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