Price-volume-mix: revenue and margin variance
Price, volume and mix that add up to the variance.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: price-volume-mix: revenue and margin variance.Updated 4 November 2026
What it does
The split of a revenue or gross margin variance into its causes. Price is the change in price on the units actually sold. Volume is the change in total units at plan price and the planned mix: the revenue the company would have earned had only the quantity moved. Mix is the rest of the volume effect, the shift between products of different prices or margins. For gross margin the same split runs on plan unit margin, with a unit cost variance beside price. The parts add up exactly to the total, product by product, and a check row holds them there.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Variance, rows 22–26: Revenue variance, Price variance, Volume variance, Mix variance…
- Variance, rows 29–34: Gross margin variance, Price variance, Unit cost variance, Volume variance…
- Variance, rows 59–63: Revenue variance, Price variance, Volume variance, Mix variance…
- Variance, rows 66–71: Gross margin variance, Price variance, Unit cost variance, Volume variance…
What a reviewer looks for
- Volume measured at actual price, so price is counted twice and the parts do not add up.
- Mix left out, so a shift towards cheaper products reads as a volume shortfall.
- Margin variances on revenue mix, when products with the same price can carry very different margins.
Learn it, then build it
Read · Guide · 11 min
Financial Modelling Best Practices: The Conventions That Make a Model Auditable
Vocabulary: Price-Volume-Mix Analysis, Gross Margin.