How Do You Calculate Revenue Variance?
Revenue variance can be calculated by subtracting the actual revenue from the budgeted revenue or expected revenue and then dividing the result by the budgeted revenue or expected revenue, expressed in percentage. The formula is: ((Actual Revenue – Budgeted Revenue)/Budgeted Revenue) x 100. A positive variance indicates that actual revenue exceeded the budgeted revenue or expected revenue, while a negative variance indicates the opposite. Analyzing revenue variance can help businesses identify areas where they need to make adjustments to improve revenue performance.