BOSTON CREAMERY, INC.

Presented by:
KRUPA . T
LAXMI . J
SUNIL . U
 VARIANCE ANALYSIS

Favorable Variance Due to Sales:

Volume $ 117,700 F
Price $ 12,000 F $ 129,700 F
Unfavorable Variance Due to Operations:
Manufacturing $ 99,000 U
Delivery $ 54,000 F
Advertising $ 29,000 U
Selling $ 6,000 F
Administration $ 10,000 F $ 58,000 U
Net Variance - Favorable $ 71,700 F
MIX VARIANCES BY PRODUCTS:
= STD Margin(Revised std. sales qty. –Actual sales qty.)

Vanilla = 0.4329 (2514347-2458212) = 24301(A)

In the same way for the remaining items.

Chocolate =35214(A)
Walnut =502(A)
Butter crunch =2249(A)
Cherry swirl =24522(F)
Straberry =42725(F)
Pecan chip =298(F)

Total 5279(F)
 Manufacturing Cost Of Goods Sold
Actual Flexible variance
Variable Costs
Dairy Ingredients $3,679,900 $ 3,648,500 $ 31400(A)
Milk Price Variance $ 57,300 $57300(A)
Sugar $ 599,900 $ 596,800 $3100(A)
Sugar Price Variance $ 23,400 $23400(A)
Flavoring $ 946,800 $ 982,100 $35300(F)
Cartons $ 567,200 $ 566,900 $300(A)
Plastic Wrap $ 28,700 $ 29,800 $1100(F)
Additives $ 235,000 $ 251,000 $16000(F)
Supplies $ 31,000 $ 35,000 $4000(F)
Misc. $ 3,000 $ 3,000 ---
Subtotal $6,172,200 $ 6,113,100 $59100(A)
Total Fix Costs $ 652,700 $ 612,800 $39900(A)
Total $6,824,900 $ 6,725,900 $99000(A)
 Exhibit 2
Manufacturing COGS
Actual Flex. Budget
Variable Costs
Dairy Ingredients $ 3,679,900 $ 3,648,500 $57,300
Milk Price Variance $ 57,300
+ $23,400
Sugar $ 599,900 $ 596,800
Sugar Price Variance $ 23,400 $80,700
Flavoring $ 946,800 $ 982,100
Deducted from
Cartons $ 567,200 $ 566,900
Manufacturing &
Plastic Wrap $ 28,700 $ 29,800
added to
Additives $ 235,000 $ 251,000
Advertising
Supplies $ 31,000 $ 35,000
(Marketing)
Misc. $ 3,000 $ 3,000
Subtotal $ 6,172,200 $ 6,113,100
Total Fix Costs $ 652,700 $ 612,800
Total $ 6,824,900 $ 6,725,900
INDUSTRIAL VOLUME VARIANCE

Industrial volume variance

= (BIV – AIV) * std market share * standard contribution.

= (11440000 – 12180000) * 0.5 * 0.4530

= 167610 (F)

Operating Cost Variance : $58000(A)

Computation in figuring out the variances
for Operations
Exhibit 1
$6,824,900
Earnings Statement Actual Flexible Budget _ 80,700
Sales- Net $ 9,657,300 $ 9,645,300 6,744,200
_ 6,725,900
Manufacturing Cost $ 6,824,900 $ 6,725,900
($18,300) U
Delivery $ 706,800 $ 760,800
$607,700
Advertising $ 607,700 $ 578,700 + 80,700
Selling $ 362,800 $ 368,800
688,400
Administrative $ 438,000 $ 448,000 _ 578,700

Total Expense $ 8,940,200 $ 8,882,200 ($109,700)U

Operations Income $ 717,100 $ 763,100

 So how will these changes
look now?

Frank Robert’s Schedule (revised)

Favorable Variance Due to Sales:
Volume $ 117,700 F
Price $ 12,000 F $ 129,700 F
Unfavorable Variance Due to Operations:
Manufacturing $ 99,000 U $18,300U
Delivery $ 54,000 F
Advertising $ 29,000 U $109,700U
Selling $ 6,000 F
Administration $ 10,000 F $ 58,000 U
Net Variance - Favorable $ 71,700 F
 U !
YO
NK
H A
T