Price, volume and mix variance template: how to split a revenue variance so the monthly review has an answer

"Revenue is 8% below budget" is not a finding, it is a prompt. The monthly review needs the next sentence: we sold fewer units, or we sold them cheaper, or we sold a different combination of products than we planned. Those are the volume, price and mix effects, and a variance report that does not separate them cannot tell anyone what to do.

This page is the decomposition, the order it is applied in, and the check that proves it is right.

The three effects

Take one product line with budget and actual for units and price.

• Price effect = (actual price minus budget price) x actual units. What the price change was worth, measured on the volume actually sold.
• Volume effect = (actual units minus budget units) x budget price. What the unit change was worth, measured at the price you planned.
• Mix effect appears once there is more than one line: the same total units sold in a different proportion across lines changes revenue, because the lines have different prices. It is separated from pure volume by comparing the actual mix at budget prices with the budgeted mix at budget prices, for the same total units.

Sign convention matters more than it sounds: pick favourable-positive and hold it everywhere, so a positive price effect always means revenue was helped.

The check that makes it usable

Price, volume and mix must add up to the total revenue variance for that line, and the lines must add up to the company total. If they do not, the decomposition has double-counted, almost always by applying the price effect on budget volume and the volume effect on actual price at the same time. Put a check column in the sheet that computes total variance minus the sum of the three effects and expects zero. Anyone reading the report will trust it because of that column.

Where the rest of the cycle sits

A variance report is one sheet of four that a budget cycle needs.

Drivers, not typed numbers. A budget built from units, price and unit cost per line, headcount and cost per head, and the opex lines, recalculates when an assumption changes. A budget typed as monthly totals has to be rebuilt every time someone asks "what if we hire two months later". Actuals entered once. Units, average price and cost of goods per line for closed months, plus the cost lines, with everything else derived. The number of closed months is itself an input, so the model knows which months are actual and which are forecast. A rolling forecast that keeps the year honest. Actual months stay actual; future months come from the drivers, scaled by a scenario multiplier (base, upside, downside). The outturn is then actuals to date plus forecast to year end, which is the number the board actually wants, rather than a budget everyone stopped believing in April. A dashboard for the review. Revenue, gross profit, people cost and EBITDA, year to date and full year, budget against actual against outturn, margins, and the price, volume and mix effects in one place.

Where the workbook fits

The FP&A Budget vs Actual and Rolling Forecast is those sheets: Budget drivers, Budget, Actuals, Variance (with the price, volume and mix decomposition per line and the check column), Rolling forecast with the scenario multipliers, a Dashboard, Inputs and a Guide sheet. Live formulas, no macros, no locked cells, Excel and Google Sheets. $59 single user, team and consultancy licences above.

It is a single-entity operating model: consolidation across entities or currencies is out of scope. For the liquidity question rather than the P&L question, the 13-week cash flow guide is the companion.

Last updated 23 September 2026.