# Average Selling Price (ASP)

 Image: Moneybestpal.com

## The phrase "average selling price" (ASP) refers to the average price at which a particular class of products or services is offered for sale.Â

It is computed by dividing the product's overall income by the total number of units sold. Analysts and investors who wish to assess a company's financial performance and market position might use ASP as a benchmark for determining pricing for their product or service.

### How to Calculate ASP

The formula for calculating ASP is simple:

ASP = Total Revenue / Total Units Sold

To illustrate, let's say a company sells 10,000 units of product A at $50 each, 15,000 units of product B at$40 each, and 20,000 units of product C at $30 each. The total revenue for the company is: Total Revenue = 10,000 *$50 + 15,000 * $40 + 20,000 *$30

Total Revenue = $1,500,000 The total number of units sold for the company is: Total Units Sold =$10,000 + $15,000 +$20,000

Total Units Sold = $45,000 Therefore, the ASP for the company is: ASP =$1,500,000 / $45,000 ASP =$33.33

Tags