Price and Quantity/Volume Variance

-Analyze the drivers of the variance

-May pinpoint what you can control

Your healthcare clinic is responsible for flu shots.

	Budget	Actual	Variance
Revenue	400,000	354,750	(45,250) U
Quantity/Volume	8,000	8,250	250
Price per Flu Shot	$50	$43	$7

Problem:

How much of the Total Variance is due to Price and how much is due to Quantity/Volume?

Was Price or Quantity/Volume controllable?

Price Variance Formula

(Actual P Budget P) x Actual V = $

Quantity/Volume Variance Formula

(Actual Q/V-Budget Q/V) x Budget P = $$

Price
Quantity/Volume
Total Variance