A trip to Grandma's house in Washington D.C. Grandma offered to pay for your trip ... but she's tough! Explain to Grandma why it cost you $4.00 more than you had planned to drive to Washington from Boston: Miles Driven x Gallons Gallons per Mile = Used X $/Gallon = Total Cost PLAN 500 1/20 25 25 $2.00 $2.00 $50.00 ACTUAL 540 1/18 $1.80 $54.00 $ (4.00) VARIANCE Unfavorable Grandma's Variance Analysis RATE 1 RATE 2 TOTAL VOLUME VARIANCE START 500 X 1/20 $2.00 = $50.00 Step 1 Unfav. 540 Volume x 1/20 X $2.00 = $54.00 $(4.00) x 1/18 x $2.00 = $60.00 Step 2 $(6.00) Unfav. 540 Gals/Mile END 540 1/18 $1.80 = $54.00 = $54.00 $ 6.00 $6.00 Fav. $/Gallon TOTAL VARIANCE $(4.00) Unfav