Original Budget

Budgeted Mkt Size

Budgeted Mkt Share
Budgeted Mkt Share (%)
Sales
VC
TFC
Profit

11440000
5720000
0.5
9219900
6628600 0.718945
1945900
645400
1

Budgeted fr Increased Demand

Actual Mkt size
Increase in mkt Size

12180000
0.065

Sales
VC
TFC
Profit

9819193.5
7059459
1945900
813834.5

Budget for Actual Mkt Share

Act Mkt Size
Act Mkt Share
Act Mtk Share (%)

12180000
5968366
0.49

Sales
VC
TFC
Profit

mkt size
mkt share
sales mix
costs

expected
expected
expected
expected

Actual
expected
expected
expected

Diff due to Increased Demand

168434.5

9622809.63
6918269.82
1945900
758639.81

Diff dut ot Mkt Share

-55194.7

9645300
6936300
1945900
763100

Diff due to Sales Mix

4460.19

Revised Budget for Actual (Given)

Sales
VC
TFC
Profit

2
Actual
Actual
expected
expected

3
Actual
Actual
Actual
expected

Mkt Size Var F

Mkt Share Var U

Sales mix Var F

Actual
Actual
Actual
Actual

BUDGETED PLAN 1973

Standard Contr.
Margin/Gallon
vanilla
Chocolate
Walnut
Buttercrunch
Cherry Swirl
Strawberry
Pecan Ship
TOTAl

0.4329
0.4535
0.5713
0.4771
0.5153
0.4683
0.5359
0.4530

Forecasted gallon
Sales
2,409,854
2,009,061
48,883
262,185
204,774
628,560
157,012
5,720,329

Forecasted
Standard Cont.
Margin
1,043,226
911,109
27,927
125,088
105,520
294,355
84,143
2,591,368

0.42
0.35
0.01
0.05
0.04
0.11
0.03
1.00

Budgeted Total expenses - Breakdown

Manufacturing
Delivery
Advertising
Selling
Administrative
TOTAL

Variable Cost
5,888,100
187,300
553,200

Fixed Cost
612,800
516,300

6,628,600

368,800
448,000
1,945,900

Sales
Variable Cost
Contribution Margin
Fixed Cost
Income From Operations

9,219,900
6,628,600
2,591,300
1,945,900
645,400

Total
6,500,900
703,600
553,200
368,800
448,000
8,574,500

1.03
0.03
0.10

1.6118 Standard Cost

Var Manuf Cost/ gallon

Var Del cost / gallon
Var Adver Cost/ Gallon

REVISED BUDGETED FOR ACTUAL VOLUME 1973

Standard Contr.
Margin/Gallon
vanilla
Chocolate
Walnut
Buttercrunch
Cherry Swirl
Strawberry
Pecan Ship
TOTAl

0.4329
0.4535
0.5713
0.4771
0.5153
0.4683
0.5359
0.4539

Forecasted gallon
Sales
2,458,212
2,018,525
50,124
268,839
261,240
747,049
164,377
5,968,366

Forecasted
Standard Cont.
Margin
1,064,160
915,401
28,636
128,263
134,617
349,843
88,090
2,709,010

Budgeted Total expenses - Breakdown

Manufacturing
Delivery
Advertising
Selling
Administrative
TOTAL

Variable Cost
6,113,100
244,500
578,700

Fixed Cost
612,800
516,300

6,936,300

368,800
448,000
1,945,900

Sales
Variable Cost
Contribution Margin
Fixed Cost
Income From Operations

9,645,300
6,936,300
2,709,000
1,945,900
763,100

Total
6,725,900
760,800
578,700
368,800
448,000
8,882,200

1.6161 Price Charged Per Gallon is Higher than

ce Charged Per Gallon is Higher than Budgeted standard cost

Standard Contr.
Margin/Gallon
vanilla
Chocolate
Walnut
Buttercrunch
Cherry Swirl
Strawberry
Pecan Ship
TOTAl

0.4329
0.4535
0.5713
0.4771
0.5153
0.4683
0.5359
0.4539

Forecasted gallon
Sales
2,458,212
2,018,525
50,124
268,839
261,240
747,049
164,377
5,968,366

Forecasted
Standard Cont.
Margin
1,064,160
915,401
28,636
128,263
134,617
349,843
88,090
2,709,010

Budgeted Total expenses - Breakdown

Manufacturing
Delivery
Advertising
Selling
Administrative
TOTAL

Variable Cost
6,143,412
195,421
577,187

Fixed Cost
612,800
516,300

6,916,020

368,800
448,000
1,945,900

Sales
Variable Cost
Contribution Margin
Fixed Cost
Income From Operations

9,619,681
6,916,020
2,703,660
1,945,900
757,760

Total
6,756,212
711,721
577,187
368,800
448,000
8,861,920

1.03
0.03
0.10

1.6118 Standard cost from Budgeted Volume a

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

Var Manuf Cost/ gallon

Var Del cost / gallon
Var Adver Cost/ Gallon

ndard cost from Budgeted Volume and sales

d 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
Delivery
Advertising
Selling
Administrative
Total Expenses

6,824,900
706,800
607,700
362,800
438,000
8,940,200

6,725,900
760,800
578,700
368,800
448,000
8,882,200

99,000
-54,000
29,000
-6,000
-10,000
58,000

717,100

763,100

-46,000

Income from Operations

EARNING STATEMENT REVISITED.

Actual

Budgeted for Actual

Variance

Sales Net

9,619,681

9,645,300

-25,619 Actual Volume at the standard price

Manufacturing Cost
Delivery
Advertising
Selling
Administrative
Total Expenses

6,824,900
706,800
607,700
362,800
438,000
8,940,200

6,725,900
760,800
578,700
368,800
448,000
8,882,200

-99,000
54,000
-29,000
6,000
10,000
-58,000

679,481

763,100

-83,619

Income from Operations

ume at the standard price considered for the actual sales.

Sales Mix and Volume variance

Product

Budgeted Volume

Actual Volume

Difference

3 = 2-1

vanilla
Chocolate
Walnut
Buttercrunch
Cherry Swirl
Strawberry
Pecan Ship
TOTAL

2,409,854
2,009,061
48,883
262,185
204,774
628,560
157,012
5,720,329

2,458,212
2,018,525
50,124
268,839
261,240
747,049
164,377
5,968,366

48,358
9,464
1,241
6,654
56,466
118,489
7,365
248,037

Mix Variance
Product

Budgeted Proportion

vanilla
Chocolate
Walnut
Buttercrunch
Cherry Swirl
Strawberry
Pecan Ship
TOTAL

0.42
0.35
0.01
0.05
0.04
0.11
0.03
1.00

Budgeted Mix at
actual Volume
1
2,514,347
2,096,175
51,003
273,554
213,653
655,815
163,820
5,968,366

Actual Sales
2
2,458,212
2,018,525
50,124
268,839
261,240
747,049
164,377
5,968,366

Sales Volume Variance

Product
vanilla
Chocolate
Walnut
Buttercrunch
Cherry Swirl
Strawberry
Pecan Ship
TOTAL

Budgeted Proportion
0.42
0.35
0.01
0.05
0.04
0.11
0.03
1.00

Budgeted Mix at
actual Volume
1
2,514,347
2,096,175
51,003
273,554
213,653
655,815
163,820
5,968,366

VARIANCE FROM OPERATIONS

Budgeted Expense at
Actual Volume

Actual

Budgeted Volume
2
2,409,854
2,009,061
48,883
262,185
204,774
628,560
157,012
5,720,329

Manufacturing
Delivery
Advertising
Selling
Administrative
TOTAL

6,756,212
711,721
577,187
368,800
448,000
8,861,920

6,824,900
706,800
607,700
362,800
438,000
8,940,200

-68,688
4,921
-30,513
6,000
10,000
-78,280

112,363
5,279
12,000

129,642

-68,688
4,921
-30,513
6,000
10,000

-78,280

Total Variance
Variance Due to Sales
Volume
Mix
Prices
Variance Due to Operations
Manufacturing
Delivery
Advertising
Selling
Administration
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 p

Second case is that if there was only the volume increase and no increase in the price then the variance statement could have been
TOTAL VARIANCE
Variance Due to Sales
Volume
Mix
Prices
Variance Due to Operations
Manufacturing
Delivery
Advertising
Selling
Administration
Net variance

Budgeted Sales Volume and Market Share

112,363
5,279
-25,619

92,023

-68,688
4,921
-30,513
6,000
10,000

-78,280
13,743

Estimated Industry volume

Budgeted Volume (Units)

11,440,000
5,720,329

Budgeted Volume (%)

50.00%

Actual Sales Volume and Market Share

Actual Industry Volume
Actual Sales Volume (unit)

12,180,000
5,968,366

Actual Share in (%)

49.00%

Variance Due to Market Share

Product

Budgeted Proportion

2,514,347
2,096,175
51,003
273,554
213,653
655,815
163,820
5,968,366

Budgeted Share of
sales at actual
industry Volume
2
2,565,736
2,139,018
52,045
279,145
218,020
669,219
167,168
6,090,350

5,968,366
6,090,350
-121,984
0.4530
-55,260

a
b
c=a-b
d
e=cxd

12,180,000
11,440,000
740,000
50.00%
370,021
0.4530
167,623

a
b
c=a-b
d
e=cxd
f
g=exf

Actual Sales
1

vanilla
Chocolate
Walnut
Buttercrunch
Cherry Swirl
Strawberry
Pecan Ship
TOTAL

0.42
0.35
0.01
0.05
0.04
0.11
0.03
1.00

Actual Sales (Unit)

Budget share at Actual industry Volume
Difference
Budgeted Unit Contribution
Variance due to market share

Variance due to Industry Volume

Actual Industry Volume
Budgeted Industry Volume
Difference
Budgeted Market Share
Market share (gain/Loss)
Budgeted unit contribution
Variance Due to industry Volume

Total of Market and Industry Volume Variance

112,363

Unit Contribution

Sales Volume
variance

0.4329
0.4535
0.5713
0.4771
0.5153
0.4683
0.5359

Difference
3 = 2-1
-56,134.76
-77,650.13
-878.60
-4,714.50
47,586.87
91,234.25
556.86

Difference
3 = 1-2
104,492.76
87,114.13
2,119.60
11,368.50
8,879.13
27,254.75
6,808.14

20,934
4,292
709
3,175
29,097
55,488
3,947
117,642

Unit Contribution
4
0.4329
0.4535
0.5713
0.4771
0.5153
0.4683
0.5359

Unit Contribution
4
0.4329
0.4535
0.5713
0.4771
0.5153
0.4683
0.5359

Sales Volume
variance
5=4x3
-24,301
-35,214
-502
-2,249
24,522
42,725
298
5,279

Sales Volume
variance
5=4x3
45,235
39,506
1,211
5,424
4,575
12,763
3,648
112,363

More expenses are incurred than standard budgeted expense

of the increased sales volume and the increased prices per gallon than the budgeted prices.

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
3 = 1-2
-51,389.41
-42,842.62
-1,042.42
-5,591.02
-4,366.74
-13,403.85
-3,348.23

Unit Contribution
4
0.4329
0.4535
0.5713
0.4771
0.5153
0.4683
0.5359

Sales Volume
variance
5=4x3
-22,246
-19,429
-596
-2,667
-2,250
-6,277
-1,794
-55,260

Performance for Frank Roberts

Revised Budgeted
Value
Sales
Advertising
Selling
TOTAL

a
9,645,300
578,700
368,800
10,592,800

Actual Value
b
9,657,300
607,700
362,800
10,627,800

Difference (A)
c = a-b
12,000
-29,000
6,000
-11,000

Actual Value at
Budgeted Standard
Cost
d
9,619,681
577,187
368,800
10,565,668

Performance for John Parker

Revised Budgeted
Value
Manufacturing
Delivery
Administrative
TOTAL

a
6,725,900
760,800
448,000
7,934,700

Actual Value
b
6,824,900
706,800
438,000
7,969,700

Difference (C)
c = a-b
-99,000
54,000
10,000
-35,000

Actual Value at
Budgeted Standard
Cost
d
6,756,212
711,721
448,000
7,915,933

Dairy Ingredients variance

Milk Price Variance
Sugar Price Variance
Flavors variance
TOTAL

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