Breaking up year over year variance changes into component parts

[Anonymous]

Hi,

Not sure if this is the best section for it but here it goes.

Traditionally we have broken up our year over year changes into two parts, a volume and a price variance. Those variances then add up to the total variance. The current forumula’s I have for them are

volume Variance =( ( [volume this year] - [volume last year] ) * [price last year] ) / [revenue last year]
price variance = ( ( [price this year] - [price last year] ) *[volume this year] ) / [revenue last year]

But what I realized is that this gives a false picture because the number of selling days (week days) differs.

So what I think I need is something like

Volume variance = [volume per sales day this year] – [volume per sales day last year] ) * [price last year] ) / [revenue last year]
price variance = ( ( [price this year] - [price last year] ) *[volume this year] ) / [revenue last year]

but the numbers don’t look right. I think I probably need a third piece something like

variance due to number of days = [average volume per day this year ] / [volume last year]*[change in number of days for the month]

or something like that but I’m not quite sure. Before everything added up real nice.

Thoughts?

[v-yulgu-msft]

Hi @Anonymous,

It would better you could provide some dummy data and show us your desired result.

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Regards,

Yuliana Gu