Free Variance Analysis Calculator
Variance Analysis Calculator
Break down exactly why profit differed from plan. Revenue and cost variance analysis with waterfall chart and plain-English explanations.
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Break down exactly why your profit differed from plan. Enter budget vs actual data for revenue and costs to see price variances, volume variances, spending variances, and efficiency variances — each labeled favorable or unfavorable. Includes a waterfall chart and auto-generated plain-English narrative explaining the main drivers.
How to Analyze Budget Variances
- 1
Choose analysis type
Select Revenue, Cost, or Both depending on what you want to analyze. Each mode shows relevant input fields.
- 2
Enter budget vs actual figures
For revenue: budgeted price, actual price, budgeted volume, actual volume. For costs: budgeted cost per unit, actual cost per unit, budgeted volume, actual volume.
- 3
Add multiple lines
Click "Add Line" to analyze multiple revenue streams or cost categories separately. Each line gets its own variance breakdown.
- 4
Read the results
Each variance is labeled favorable (green) or unfavorable (red). The waterfall chart shows how you got from budget to actual, and the auto-narrative explains the biggest drivers in plain English.
Why Variance Analysis Matters
Turn "we missed budget" into "here's exactly why"
Knowing you missed by $50K is useless. Knowing you missed because volume was down 10% but pricing was actually favorable — that's actionable. Variance analysis decomposes the total into specific, fixable components.
Separate price from volume effects
Did revenue drop because you sold fewer units or because you discounted prices? These require completely different responses. Variance analysis separates the two so you can act on the right lever.
Hold teams accountable
The purchasing team controls cost variances. The sales team controls price and volume variances. Variance analysis assigns results to the team that can actually influence them.
CPA exam core topic
Flexible budget variances, price variances, and efficiency variances are heavily tested on the BAR section. This calculator covers all the standard variance decomposition formulas.
Frequently Asked Questions
What is a favorable vs unfavorable variance?
A favorable variance increases profit — higher revenue or lower costs than budgeted. An unfavorable variance decreases profit — lower revenue or higher costs. Note: for costs, spending LESS than budget is favorable (green). For revenue, earning MORE than budget is favorable.
What is a price variance?
Revenue price variance = (Actual Price - Budget Price) × Actual Volume. It isolates the impact of charging a different price than planned, holding volume constant. A positive price variance means you charged more than budget — favorable for revenue.
What is a volume variance?
Revenue volume variance = (Actual Volume - Budget Volume) × Budget Price. It isolates the impact of selling a different quantity than planned, using the budgeted price. This tells you whether demand was stronger or weaker than expected.
How do I read a waterfall chart?
Start with the budget bar on the left. Each subsequent bar shows a variance — green bars go up (favorable), red bars go down (unfavorable). The final bar on the right is your actual result. The waterfall visually shows how each variance moved you from budget to actual.
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