Original Budget

Budgeted Mkt Size 11440000

Budgeted Mkt Share 5720000

Budgeted Mkt Share (%) 0.5

Sales 9219900

VC 6628600 0.718945

TFC 1945900

Profit 645400

1

Budgeted fr Increased Demand mkt size expected Actual

Actual Mkt size 12180000 mkt share expected expected

Increase in mkt Size 0.065 sales mix expected expected

costs expected expected

Sales 9819193.5

VC 7059459

TFC 1945900

Profit 813834.5 Diff due to Increased Demand 168434.5

Budget for Actual Mkt Share

Act Mkt Size 12180000

Act Mkt Share 5968366

Act Mtk Share (%) 0.49

Sales 9622809.63

VC 6918269.82

TFC 1945900

Profit 758639.81 Diff dut ot Mkt Share -55194.7

Revised Budget for Actual (Given)

Sales 9645300

VC 6936300

TFC 1945900

Profit 763100 Diff due to Sales Mix 4460.19

2 3

Actual Actual Actual

Actual Actual Actual

expected Actual Actual

expected expected Actual

Mkt Size Var F

Mkt Share VarU

Sales mix Var F

BUDGETED PLAN 1973

Standard Contr.

Margin/Gallon

Forecasted gallon

Sales

Forecasted

Standard Cont.

Margin

vanilla 0.4329 2,409,854 1,043,226 0.42

Chocolate 0.4535 2,009,061 911,109 0.35

Walnut 0.5713 48,883 27,927 0.01

Buttercrunch 0.4771 262,185 125,088 0.05

Cherry Swirl 0.5153 204,774 105,520 0.04

Strawberry 0.4683 628,560 294,355 0.11

Pecan Ship 0.5359 157,012 84,143 0.03

TOTAl 0.4530 5,720,329 2,591,368 1.00

Variable Cost Fixed Cost Total

Manufacturing 5,888,100 612,800 6,500,900 1.03

Delivery 187,300 516,300 703,600 0.03

Advertising 553,200 553,200 0.10

Selling 368,800 368,800

Administrative 448,000 448,000

TOTAL 6,628,600 1,945,900 8,574,500

9,219,900 1.6118 Standard Cost

6,628,600

2,591,300

1,945,900

645,400 Income From Operations

Budgeted Total expenses - Breakdown

Sales

Variable Cost

Contribution Margin

Fixed Cost

Var Manuf Cost/ gallon

Var Del cost / gallon

Var Adver Cost/ Gallon

REVISED BUDGETED FOR ACTUAL VOLUME 1973

Standard Contr.

Margin/Gallon

Forecasted gallon

Sales

Forecasted

Standard Cont.

Margin

vanilla 0.4329 2,458,212 1,064,160

Chocolate 0.4535 2,018,525 915,401

Walnut 0.5713 50,124 28,636

Buttercrunch 0.4771 268,839 128,263

Cherry Swirl 0.5153 261,240 134,617

Strawberry 0.4683 747,049 349,843

Pecan Ship 0.5359 164,377 88,090

TOTAl 0.4539 5,968,366 2,709,010

Variable Cost Fixed Cost Total

Manufacturing 6,113,100 612,800 6,725,900

Delivery 244,500 516,300 760,800

Advertising 578,700 578,700

Selling 368,800 368,800

Administrative 448,000 448,000

TOTAL 6,936,300 1,945,900 8,882,200

9,645,300 1.6161 Price Charged Per Gallon is Higher than Budgeted standard cost

6,936,300

2,709,000

1,945,900

763,100 Income From Operations

Budgeted Total expenses - Breakdown

Sales

Variable Cost

Contribution Margin

Fixed Cost

Price Charged Per Gallon is Higher than Budgeted standard cost

Standard Contr.

Margin/Gallon

Forecasted gallon

Sales

Forecasted

Standard Cont.

Margin

vanilla 0.4329 2,458,212 1,064,160

Chocolate 0.4535 2,018,525 915,401

Walnut 0.5713 50,124 28,636

Buttercrunch 0.4771 268,839 128,263

Cherry Swirl 0.5153 261,240 134,617

Strawberry 0.4683 747,049 349,843

Pecan Ship 0.5359 164,377 88,090

TOTAl 0.4539 5,968,366 2,709,010

Variable Cost Fixed Cost Total

Manufacturing 6,143,412 612,800 6,756,212 1.03

Delivery 195,421 516,300 711,721 0.03

Advertising 577,187 577,187 0.10

Selling 368,800 368,800

Administrative 448,000 448,000

TOTAL 6,916,020 1,945,900 8,861,920

9,619,681 1.6118 Standard cost from Budgeted Volume and sales

6,916,020

2,703,660

1,945,900

757,760

Here the standard Costs derived from the budgeted sales and budgeted volume are used on the Actual volume to arrive at the variable cost and the sales amount.

Income From Operations

Budgeted Total expenses - Breakdown

Sales

Variable Cost

Contribution Margin

Fixed Cost

Var Manuf Cost/ gallon

Var Del cost / gallon

Var Adver Cost/ Gallon

Standard cost from Budgeted Volume and sales

Here the standard Costs derived from the budgeted sales and budgeted volume are used on the Actual volume to arrive at the variable cost and the sales amount.

Actual Budgeted for Actual Variance

Sales Net 9,657,300 9,645,300 12,000

Manufacturing Cost 6,824,900 6,725,900 99,000

Delivery 706,800 760,800 -54,000

Advertising 607,700 578,700 29,000

Selling 362,800 368,800 -6,000

Administrative 438,000 448,000 -10,000

Total Expenses 8,940,200 8,882,200 58,000

Income from Operations 717,100 763,100 -46,000

EARNING STATEMENT REVISITED.

Actual Budgeted for Actual Variance

Sales Net 9,619,681 9,645,300 -25,619 Actual Volume at the standard price considered for the actual sales.

Manufacturing Cost 6,824,900 6,725,900 -99,000

Delivery 706,800 760,800 54,000

Advertising 607,700 578,700 -29,000

Selling 362,800 368,800 6,000

Administrative 438,000 448,000 10,000

Total Expenses 8,940,200 8,882,200 -58,000

Income from Operations 679,481 763,100 -83,619

Actual Volume at the standard price considered for the actual sales.

Sales Mix and Volume variance

Product Budgeted Volume Actual Volume Difference

1 2 3 = 2-1

vanilla 2,409,854 2,458,212 48,358

Chocolate 2,009,061 2,018,525 9,464

Walnut 48,883 50,124 1,241

Buttercrunch 262,185 268,839 6,654

Cherry Swirl 204,774 261,240 56,466

Strawberry 628,560 747,049 118,489

Pecan Ship 157,012 164,377 7,365

TOTAL 5,720,329 5,968,366 248,037

Mix Variance

Product Budgeted ProportionBudgeted Mix at

actual VolumeActual Sales

1 2

vanilla 0.42 2,514,347 2,458,212

Chocolate 0.35 2,096,175 2,018,525

Walnut 0.01 51,003 50,124

Buttercrunch 0.05 273,554 268,839

Cherry Swirl 0.04 213,653 261,240

Strawberry 0.11 655,815 747,049

Pecan Ship 0.03 163,820 164,377

TOTAL 1.00 5,968,366 5,968,366

Sales Volume Variance

Product Budgeted ProportionBudgeted Mix at

actual VolumeBudgeted Volume

1 2

vanilla 0.42 2,514,347 2,409,854

Chocolate 0.35 2,096,175 2,009,061

Walnut 0.01 51,003 48,883

Buttercrunch 0.05 273,554 262,185

Cherry Swirl 0.04 213,653 204,774

Strawberry 0.11 655,815 628,560

Pecan Ship 0.03 163,820 157,012

TOTAL 1.00 5,968,366 5,720,329

VARIANCE FROM OPERATIONS

Budgeted Expense at

Actual VolumeActual

Manufacturing 6,756,212 6,824,900 -68,688

Delivery 711,721 706,800 4,921

Advertising 577,187 607,700 -30,513

Selling 368,800 362,800 6,000

Administrative 448,000 438,000 10,000

TOTAL 8,861,920 8,940,200 -78,280

Total Variance

112,363

5,279

12,000 129,642

-68,688

4,921

-30,513

6,000

10,000 -78,280

51,362

So here we see that though the total variance is positive it is just because of the increased sales volume and the increased prices per gallon than the budgeted prices.

Second case is that if there was only the volume increase and no increase in the price then the variance statement could have been less favourable.

TOTAL VARIANCE

112,363

5,279

-25,619 92,023

-68,688

4,921

-30,513

6,000

10,000 -78,280

13,743

Budgeted Sales Volume and Market Share

Mix

Variance Due to Sales

Volume

Prices

Variance Due to Operations

Manufacturing

Delivery

Advertising

Selling

Administration

Net variance

Net variance

Variance Due to Sales

Volume

Mix

Prices

Variance Due to Operations

Manufacturing

Delivery

Advertising

Selling

Administration

11,440,000

5,720,329

50.00%

Actual Sales Volume and Market Share

12,180,000

5,968,366

49.00%

Variance Due to Market Share

Product Budgeted Proportion Actual Sales

Budgeted Share of

sales at actual

industry Volume

1 2

vanilla 0.42 2,514,347 2,565,736

Chocolate 0.35 2,096,175 2,139,018

Walnut 0.01 51,003 52,045

Buttercrunch 0.05 273,554 279,145

Cherry Swirl 0.04 213,653 218,020

Strawberry 0.11 655,815 669,219

Pecan Ship 0.03 163,820 167,168

TOTAL 1.00 5,968,366 6,090,350

5,968,366 a

6,090,350 b

-121,984 c=a-b

0.4530 d

-55,260 e = c x d

Variance due to Industry Volume

12,180,000 a

11,440,000 b

740,000 c=a-b

50.00% d

370,021 e = c x d

0.4530 f

167,623 g = e x f

Total of Market and Industry Volume Variance

112,363

Estimated Industry volume

Budgeted Volume (Units)

Budgeted Volume (%)

Actual Sales (Unit)

Budget share at Actual industry Volume

Difference

Budgeted Unit Contribution

Actual Industry Volume

Actual Sales Volume (unit)

Actual Share in (%)

Budgeted Market Share

Market share (gain/Loss)

Budgeted unit contribution

Variance Due to industry Volume

Variance due to market share

Actual Industry Volume

Budgeted Industry Volume

Difference

Unit ContributionSales Volume

variance

0.4329 20,934

0.4535 4,292

0.5713 709

0.4771 3,175

0.5153 29,097

0.4683 55,488

0.5359 3,947

117,642

Difference Unit ContributionSales Volume

variance

3 = 2-1 4 5 = 4 x 3

-56,134.76 0.4329 -24,301

-77,650.13 0.4535 -35,214

-878.60 0.5713 -502

-4,714.50 0.4771 -2,249

47,586.87 0.5153 24,522

91,234.25 0.4683 42,725

556.86 0.5359 298

5,279

Difference Unit ContributionSales Volume

variance

3 = 1-2 4 5 = 4 x 3

104,492.76 0.4329 45,235

87,114.13 0.4535 39,506

2,119.60 0.5713 1,211

11,368.50 0.4771 5,424

8,879.13 0.5153 4,575

27,254.75 0.4683 12,763

6,808.14 0.5359 3,648

112,363

More expenses are incurred than standard budgeted expense

So here we see that though the total variance is positive it is just because of the increased sales volume and the increased prices per gallon than the budgeted prices.

Second case is that if there was only the volume increase and no increase in the price then the variance statement could have been less favourable.

Price variance considering Actual Volume at the standard price taken for the actual sales amount.

Difference Unit ContributionSales Volume

variance

3 = 1-2 4 5 = 4 x 3

-51,389.41 0.4329 -22,246

-42,842.62 0.4535 -19,429

-1,042.42 0.5713 -596

-5,591.02 0.4771 -2,667

-4,366.74 0.5153 -2,250

-13,403.85 0.4683 -6,277

-3,348.23 0.5359 -1,794

-55,260

Revised Budgeted

ValueActual Value Difference (A)

Actual Value at

Budgeted Standard

Cost

a b c = a-b d

Sales 9,645,300 9,657,300 12,000 9,619,681

Advertising 578,700 607,700 -29,000 577,187

Selling 368,800 362,800 6,000 368,800

TOTAL 10,592,800 10,627,800 -11,000 10,565,668

Revised Budgeted

ValueActual Value Difference (C)

Actual Value at

Budgeted Standard

Cost

a b c = a-b d

Manufacturing 6,725,900 6,824,900 -99,000 6,756,212

Delivery 760,800 706,800 54,000 711,721

Administrative 448,000 438,000 10,000 448,000

TOTAL 7,934,700 7,969,700 -35,000 7,915,933

TOTAL

Performance for John Parker

Performance for Frank Roberts

Dairy Ingredients variance

Milk Price Variance

Sugar Price Variance

Flavors variance

Difference (B)

e = d-b

37,619

-30,513

-6,000

1,107

Difference (D)

e = d-b

-68,688

4,921

10,000

-53,767

-31400

-57300

-23400

35300

-76800

Performance for John Parker

Performance for Frank Roberts