VARIANCE COMPUTATION

USING FS METHOD Actual

Sales
(4800 X 12.50, 5000 x 13) 60,000.00
(5300 X 10.00, 5000 x 10) 53,000.00
Total sales 113,000.00
Less: Variable cost
(4800 X 6.90, 5000 x 7) -33,120.00
(5300 X 5.65, 5000 x 5.50) -29,945.00
Total variable cost -63,065.00
Contribution Margin 49,935.00

USING TABULAR FORM/CM APPROACH

at Budget at Actual
Flavor Qty SP VC CM Profit Qty SP VC
Zim 5,000 13.00 7.00 6.00 30,000 4,800 12.50 6.90
Zoom 5,000 10.00 5.50 4.50 22,500 5,300 10.00 5.65
Total 10,000 52,500.00 10,100
Less: Budgeted
Variance

Sales Variance
at Budget at Actual
Product Qty SP Profit Qty SP
Zim 5,000 13.00 65,000 4,800 12.50
Zoom 5,000 10.00 50,000 5,300 10.00
Total 10,000 115,000.00 10,100
Less: Budgeted
Variance (U)

Cost Variance
at Budget at Actual
Flavor Qty VC CM Profit Qty VC
Zim 5,000 7.00 35,000 4,800 6.90
Zoom 5,000 5.50 27,500 5,300 5.65
Total 10,000 62,500.00 10,100
Less: Budgeted
Variance (U)

Total variance
0.5000 0.4752
#REF! 1,200 #REF!
#REF! #REF! #REF!
0.5000 #REF! 0.5248
#REF! -1,350 #REF!
#REF!
CM vol/qty CM rate var
-1,200 -1,920
#REF! #REF!
#REF! #REF!
1,350 -795
#REF! #REF!
#REF!
 Budget Variance Responsible center

65,000.00 -5,000.00
50,000.00 3,000.00
115,000.00 -2,000.00 Sales Dept

-35,000.00 1,880.00
-27,500.00 -2,445.00
-62,500.00 -565.00 Production dept
52,500.00 -2,565.00 on Account of P2000 sales dept is accountable while on account of 565 Production dept is acco

at Actual
CM Profit
5.60 26,880
4.35 23,055
49,935.00
52,500.00
-2,565 SAME

at Actual
Profit
60,000
53,000 -
113,000.00
115,000.00
2,000

at Actual
CM Profit
33,120
29,945
63,065.00
62,500.00
565

2,565 SAME

\
565 Production dept is accountable
Sales Variance
Qty variance
Product Actual qty Budgetted qty (a-b=c BSP Var (c x d)
Zim 4,800 5,000 -200 13.00 - 2,600
Zoom 5,300 5,000 300 10.00 3,000
Total 10,100 10,000
Variance (F) 400

Total Sales variance (unfavorable)

not covered by book

Cost
Qty variance
Product Actual qty Budgetted qty (a-b=c BVC Var (c x d)
Zim 4,800 5,000 -200 7.00 - 1,400
Zoom 5,300 5,000 300 5.50 1,650
Total 10,100 10,000
Variance (U) 250

Cost variance (unfav)

not covered by book

CM/Profit variance
Qty variance
Product Actual_a Budget_b (a-b=c BCM Var (c x d)
Zim 4,800 5,000 -200 6.00 - 1,200
Zoom 5,300 5,000 300 4.50 1,350
Total (favorable) 150 SAME

CM variance

not covered by book

To analyze further what contributed to the variance of P150, we can further calculate the variance due to sales volume/mi

Sales Volume variance (CM level) = (10100-10000)*(((5000*6)+(5000*4.5))/10000)

525 Covered
Sales Mix variance (CM level) = ((((5000*6)+(5000*4.5))/10000)-(((4800*6)+(5300*4.5))/10100))*10100
-375 Covered
Net 150 SAME
 Price variance at Actual
Actual_a Budget_b (a-b=c Actual Qty Var (c x d)
12.50 13.00 -0.50 4,800 - 2,400
10.00 10.00 0.00 5,300 -
22.50 23
Variance (U) -2,400 Covered

-2,000 REVENUE CENTER

Cost variance at Actual

Actual Budget_b (a-b=c Actual Qty Var (c x d)
6.90 7.00 -0.10 4,800 -480.00
5.65 5.50 0.15 5,300 795.00
10,100
Variance (U) 315.00

565.00 COST CENTER

not covered by book

at Actual
Actual Budget_b (a-b=c Actual Qty Var (c x d)
5.60 6.00 -0.40 4,800 - 1,920
4.35 4.50 -0.15 5,300 - 795
-2,715

-2,565 PROFIT CENTER

not covered by book

ariance due to sales volume/mix as follows:

Covered
5))/10100))*10100
Covered