Good morning. Revenue moved last month. The reason you were given arrived before the line-level data did.
Finance.
Price, Volume, Mix
Take last month's revenue movement — the number you reported, the number somebody was congratulated for — and say whether it came from charging more, from selling more, or from selling a different blend. If you're guessing, guess mix: it's the one that moves your average while every actual price stays exactly where it was.
A total is a verdict, and a verdict can't be acted on. The only useful question about a number that moved is which of its components moved, in which direction, and by how much each. That principle was settled in factory cost accounting a century ago. G. Charter Harrison, an English-born accountant working in American plants, is generally credited with building the first complete standard-cost system, installed at the Boss Manufacturing Company around 1911, and the series he began publishing in 1918, Cost Accounting to Aid Production, set out the first worked equations for analysing a variance. His contribution was procedural rather than mathematical. Manufacturing has honoured it ever since: no factory reports a cost overrun without splitting it into what was paid for the materials and how much of them got used. Revenue is where the discipline was quietly abandoned. Most businesses report a single top-line movement and then hold a meeting to invent a reason for it, when there are exactly three reasons available and two subtractions will tell you which.
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