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
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