Variance Bridges for FP&A: Price, Volume, Mix, FX & Cost Effects from Budget to Actual

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Compute budget and actual revenue for four products, the variance in dollars and in percent, the pooled variance % of the quarter and a Favourable / Unfavourable / On budget flag with IFS.
• Split each product's revenue variance into a price effect and a volume effect that add up exactly, then measure the interaction term that decides which effect a different convention would show.
• Split the volume effect into a pure volume effect (more units in total at the budget mix) and a mix effect (a shift between cheap and expensive products), and you confirm the total mix effect with the average-price shortcut.
• Bridge Larchmont's budget gross margin to the actual one with four effects – price, unit cost, volume and mix – and check that budget margin plus effects lands exactly on the actual margin.
• Translate five sales entities into US dollars at actual and at budget rates, separate the FX effect from the underlying performance and compute the constant-currency growth against the budget.
• Tag ten retail accounts as New, Lost or Existing with IFS and bridge last year's revenue to this year's: revenue won from new customers, revenue lost and the change at existing customers, all with SUMIFS.
• Flex Larchmont's cost budget to the actual volume, split each cost line's variance into a volume variance and a spending variance, and total the spending variance that managers really have to explain.
• Close Rowan's revenue bridge for the board pack: the end value, a materiality flag per effect with ABS and IFS, the biggest driver with INDEX/MATCH, and a waterfall chart from budget to actual.