Paul BarnhurstFP&A Expert Empowering Finance Professionals to Excel Everday

Great tools still need smart users.

22 Oct 2025 · 1 min

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1:17

Paul Barnhurst walks through results from an automated price/volume/mix variance analysis. He reports the tool computed price perfectly (gross margin per unit $30 better), mis-computed volume (tool reported -250 but the correct volume effect should be +125), and computed mix correctly. The clip is a spoken walkthrough pointing out where an automated calculation matched expectations and where it erred.

Questions this video answers

$30 better on price (gross margin per unit).

+125 (volume effect).

-250 (the tool's computed volume effect).

All right, we're back. It only took about a minute to do the first one and then another minute to do the next two. I didn't ask it to do volume or mix. It said, hey, do you want me to answer those as well? And I said, yes. So let's walk through it. On price did it perfectly. It took the gross margin from the actual, compared it to the gross margin of the budget and the units and said, here's the difference in price. So we're $30 better on price, gross margin per unit, which is, you know, we're kind of calling our price part of this pvm and that's really BB was better. This one was worse. One was slightly better. Makes sense. All good volume didn't quite get that right. So what we wanted for volume is we want actual volume in total minus budget volume times average budget price. It took the individual prices, but it didn't look like it did it quite the way it was supposed to. And so it came up with negative 250. The actual should have been 125 on volume. It got wrong. It did everything right on mix because the volume, if you look at average budget price, is 125. And our volume was 100 better. So 100, 125 should have been our 125. Here it gave us minus 250. So it did something wrong on that one. And then it got the mix right. So pretty good. Not bad.