Boston Cremery Presentation
Boston Creamery,
Inc.
Presented by:
Tuan Nguyen
Erin Robbins
Rachael Romo
Jo-Chen Sun
Outlin e Prepare a variance analysis schedule
Restructure the variance analysis report Recommend corrective actions based on the profit variance analysis and commendations Point out weaknesses of their “Profit
planning & control” management theory Overall assessment of their “management to
Jim Peterson is the president of the Ice
Cream Division of Boston Creamery, Inc.
Awaiting Frank
Roberts report to the managers JIM PETERSON
Frank Roberts is the VP for Sales and Marketing of the
Ice Cream Division of Boston Creamery, Inc.
Favorable Variance Due to Sales:
Volume
$ 117,700
Price
$ 12,000
Unfavorable Variance Due to Operations:
Manufacturing
$ 99,000
Delivery
$ 54,000
Advertising
$ 29,000
Selling
$
6,000
Administration
$ 10,000
Net Variance - Favorable
F
F $ 129,700 F
U
F
U
F
F $ 58,000 U
$ 71,700 F
Frank introduces his profit variance schedule to Jim
Peterson
Frank
Q:
What changes would you make in this variance analysis schedule?
Frank Robert’s
Schedule
Favorable Variance Due to Sales:
Volume
$ 117,700
Price
$ 12,000
Unfavorable Variance Due to Operations:
Manufacturing
$ 99,000
Delivery
$ 54,000
Advertising
$ 29,000
Selling
$
6,000
Administration
$ 10,000
Net Variance - Favorable
F
F $ 129,700 F
U
F
U
F
F $ 58,000 U
$ 71,700 F
Including suggestions offered by Jim
Peterson and incorporating them without making the schedule “too technical.”
Break down sales volume variance down to… -parts that are attributed to the sales mix.
-parts that are attributed the to market
-parts
that are share shifts. attributed to the overall volume changes. JIM
Analysis of Variance from Forecasted Operating
Income
Information given: EXHIBIT 3
Month
(1) Actual Income from Operation
(2) Budgeted Income @Forecasted Volume(Original Plan)
(3) Budgeted Income @Actual Volume(Revised Plan)
Year to Date
$ 717,100
$ 645,400
$ 763,100
Variance Due to Sales volume and Mix [(3) minus
Inc.
Presented by:
Tuan Nguyen
Erin Robbins
Rachael Romo
Jo-Chen Sun
Outlin e Prepare a variance analysis schedule
Restructure the variance analysis report Recommend corrective actions based on the profit variance analysis and commendations Point out weaknesses of their “Profit
planning & control” management theory Overall assessment of their “management to
Jim Peterson is the president of the Ice
Cream Division of Boston Creamery, Inc.
Awaiting Frank
Roberts report to the managers JIM PETERSON
Frank Roberts is the VP for Sales and Marketing of the
Ice Cream Division of Boston Creamery, Inc.
Favorable Variance Due to Sales:
Volume
$ 117,700
Price
$ 12,000
Unfavorable Variance Due to Operations:
Manufacturing
$ 99,000
Delivery
$ 54,000
Advertising
$ 29,000
Selling
$
6,000
Administration
$ 10,000
Net Variance - Favorable
F
F $ 129,700 F
U
F
U
F
F $ 58,000 U
$ 71,700 F
Frank introduces his profit variance schedule to Jim
Peterson
Frank
Q:
What changes would you make in this variance analysis schedule?
Frank Robert’s
Schedule
Favorable Variance Due to Sales:
Volume
$ 117,700
Price
$ 12,000
Unfavorable Variance Due to Operations:
Manufacturing
$ 99,000
Delivery
$ 54,000
Advertising
$ 29,000
Selling
$
6,000
Administration
$ 10,000
Net Variance - Favorable
F
F $ 129,700 F
U
F
U
F
F $ 58,000 U
$ 71,700 F
Including suggestions offered by Jim
Peterson and incorporating them without making the schedule “too technical.”
Break down sales volume variance down to… -parts that are attributed to the sales mix.
-parts that are attributed the to market
-parts
that are share shifts. attributed to the overall volume changes. JIM
Analysis of Variance from Forecasted Operating
Income
Information given: EXHIBIT 3
Month
(1) Actual Income from Operation
(2) Budgeted Income @Forecasted Volume(Original Plan)
(3) Budgeted Income @Actual Volume(Revised Plan)
Year to Date
$ 717,100
$ 645,400
$ 763,100
Variance Due to Sales volume and Mix [(3) minus