<Tr> <Td> </Td> <Td> This article does not cite any sources . Please help improve this article by adding citations to reliable sources . Unsourced material may be challenged and removed . (July 2007) (Learn how and when to remove this template message) </Td> </Tr> <P> Sales variance is the difference between actual sales and budget sales . It is used to measure the performance of a sales function, and / or analyze business results to better understand market conditions . </P> <P> There are two reasons actual sales can vary from planned sales: either the volume sold varied from plan (sales volume variance), or sales were at a different price from what was planned (sales price variance). Both scenarios could also simultaneously contribute to the variance . </P> <P> For example: The plan was to sell 5 widgets at $3 each, for a budgeted sales of: (5 * $3) = $15 . In reality, 6 widgets were sold at $2 each, for an actual sales of: (6 * $2) = $12 . The total variance was thus ($12--$15) = $3 (U) nfavourable or minus $3, since total sales was less than planned . </P>

Name two possible reasons why the actual sales are less than the projected sales