How to Calculate a Revenue Variance (Example)

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This video shows an example of how to calculate a revenue variance.

A revenue variance is the difference between the actual revenue and the revenue that should have occurred, given the activity level (this is the revenue predicted by the flexible budget). Thus, if the actual revenue is $380,000 and the revenue predicted by the flexible budget is $400,000, the company would have an unfavorable revenue variance of $20,000. One reason this might have occurred is if the company unexpectedly gave price discounts to some of its customers.—
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