boston creamery analysis
TRANSCRIPT
Original BudgetBudgeted Mkt Size 11440000Budgeted Mkt Share 5720000Budgeted Mkt Share (%) 0.5
Sales 9219900VC 6628600 0.718945TFC 1945900Profit 645400
1Budgeted fr Increased Demand mkt size expected ActualActual Mkt size 12180000 mkt share expected expectedIncrease in mkt Size 0.065 sales mix expected expected
costs expected expectedSales 9819193.5VC 7059459TFC 1945900Profit 813834.5 Diff due to Increased Demand 168434.5
Budget for Actual Mkt ShareAct Mkt Size 12180000Act Mkt Share 5968366Act Mtk Share (%) 0.49
Sales 9622809.63VC 6918269.82TFC 1945900Profit 758639.81 Diff dut ot Mkt Share -55194.69
Revised Budget for Actual (Given)
Sales 9645300VC 6936300TFC 1945900Profit 763100 Diff due to Sales Mix 4460.19
2 3Actual Actual ActualActual Actual Actualexpected Actual Actualexpected expected Actual
Mkt Size Var F
Mkt Share VarU
Sales mix Var F
BUDGETED PLAN 1973
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
Budgeted Total expenses - Breakdown
Variable Cost Fixed Cost TotalManufacturing 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
Sales 9,219,900 1.6118 Standard CostVariable Cost 6,628,600
Contribution Margin 2,591,300 Fixed Cost 1,945,900
Income From Operations 645,400
Standard Contr. Margin/Gallon
Forecasted gallon Sales
Forecasted Standard Cont. Margin
Var Manuf Cost/ gallonVar Del cost / gallonVar Adver Cost/ Gallon
REVISED BUDGETED FOR ACTUAL VOLUME 1973
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
Budgeted Total expenses - Breakdown
Variable Cost Fixed Cost TotalManufacturing 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
Sales 9,645,300 1.6161 Price Charged Per Gallon is Higher than Budgeted standard cost Variable Cost 6,936,300
Contribution Margin 2,709,000 Fixed Cost 1,945,900
Income From Operations 763,100
Standard Contr. Margin/Gallon
Forecasted gallon Sales
Forecasted Standard Cont. Margin
Price Charged Per Gallon is Higher than Budgeted standard cost
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
Budgeted Total expenses - Breakdown
Variable Cost Fixed Cost TotalManufacturing 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
Sales 9,619,681 1.6118 Standard cost from Budgeted Volume and salesVariable Cost 6,916,020
Contribution Margin 2,703,660 Fixed Cost 1,945,900
Income From Operations 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.
Standard Contr. Margin/Gallon
Forecasted gallon Sales
Forecasted Standard Cont. Margin
Var Manuf Cost/ gallonVar Del cost / gallonVar 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 = 2-1vanilla 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 Proportion Actual Sales
1 2vanilla 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 Proportion Budgeted Volume
1 2vanilla 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 Mix at actual Volume
Budgeted Mix at actual Volume
Actual
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
Variance Due to SalesVolume 112,363 Mix 5,279 Prices 12,000 129,642
Variance Due to OperationsManufacturing -68,688 Delivery 4,921 Advertising -30,513 Selling 6,000 Administration 10,000 -78,280
Net variance 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
Variance Due to SalesVolume 112,363 Mix 5,279 Prices -25,619 92,023
Variance Due to OperationsManufacturing -68,688 Delivery 4,921 Advertising -30,513 Selling 6,000 Administration 10,000 -78,280
Net variance 13,743
Budgeted Expense at Actual Volume
Budgeted Sales Volume and Market Share
Estimated Industry volume 11,440,000 Budgeted Volume (Units) 5,720,329
Budgeted Volume (%) 50.00%
Actual Sales Volume and Market Share
Actual Industry Volume 12,180,000 Actual Sales Volume (unit) 5,968,366
Actual Share in (%) 49.00%
Variance Due to Market Share
Product Budgeted Proportion Actual Sales
1 2vanilla 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
Actual Sales (Unit) 5,968,366 aBudget share at Actual industry Volume 6,090,350 bDifference -121,984 c=a-bBudgeted Unit Contribution 0.4530 dVariance due to market share -55,260 e = c x d
Variance due to Industry Volume
Actual Industry Volume 12,180,000 aBudgeted Industry Volume 11,440,000 bDifference 740,000 c=a-bBudgeted Market Share 50.00% dMarket share (gain/Loss) 370,021 e = c x d
Budgeted Share of sales at actual
industry Volume
Budgeted unit contribution 0.4530 fVariance Due to industry Volume 167,623 g = e x f
Total of Market and Industry Volume Variance 112,363
Unit Contribution
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 Contribution
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 Contribution
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
Sales Volume variance
Sales Volume variance
Sales Volume variance
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 Contribution
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
Sales Volume variance
Performance for Frank Roberts
Actual Value Difference (A)
a b c = a-b dSales 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
Performance for John Parker
Actual Value Difference (C)
a b c = a-b dManufacturing 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
Dairy Ingredients varianceMilk Price Variance
Sugar Price VarianceFlavors variance
TOTAL
Revised Budgeted Value
Actual Value at Budgeted Standard
Cost
Revised Budgeted Value
Actual Value at Budgeted Standard
Cost
Performance for Frank Roberts
Difference (B)
e = d-b 37,619 -30,513 -6,000 1,107
Performance for John Parker
Difference (D)
e = d-b -68,688 4,921 10,000 -53,767
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