BOSTON CREAMERY, Inc.

Original Profit Plan

For the Year 1973

Standard Contribution Forecasted Forecasted Standard

Margin/Galon Gallon Sales Contribution Margin

Vanilla $ 0.4329 2,409,854 $ 1,043,226

Chocolate $ 0.4535 2,009,061 $ 911,109
Walnut $ 0.5713 48,883 $ 27,927
Buttercrunch $ 0.4771 262,185 $ 125,088
Cherry Swirl $ 0.5153 204,774 $ 105,520
Strawberry $ 0.4683 628,560 $ 294,355
Pecan Chip $ 0.5359 157,012 $ 84,143
Total $ 0.4530 5,720,329 $ 2,591,368

Breakdown of Budgeted Total Expenses

Variable Costs Fixed Costs Total
Manufacturing $ 5,888,100 $ 612,800 $ 6,500,900
Delivery $ 187,300 $ 516,300 $ 703,600
Advertising $ 553,200 $ - $ 553,200
Selling $ - $ 368,800 $ 368,800
Administrative $ - $ 448,000 $ 448,000
Total $ 6,628,600 $ 1,945,900 $ 8,574,500

RECAP
Sales $ 9,219,900
Variable Cost of Sales $ 6,628,600
Contribution Margin $ 2,591,300
Fixed Costs $ 1,945,900
Income from Operations $ 645,400
 Rounding
Forecasted Standard
Contribution Margin

$ 1,043,200
$ 911,100
$ 28,000
$ 125,000
$ 105,500
$ 294,400
$ 84,100
$ 2,591,300
BOSTON CREAMERY, Inc.
Revise Profit Plan
Budgeted Profit at Actual Volume
For the Year 1973

Standard Contribution Actual Standard Contribution

Margin/Galon Gallon Sales 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 Chip $ 0.5359 164,377 $ 88,090
Total $ 0.4539 5,968,366 $ 2,709,010

Breakdown of Budgeted Total Expenses

Variable Costs Fixed Costs 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

RECAP
Sales $ 9,645,300
Variable Cost of Sales $ 6,936,300
Contribution Margin $ 2,709,000
Fixed Costs $ 1,945,900
Income from Operations $ 763,100
 Rounding
Forecasted Standard
Contribution Margin

$ 1,064,200
$ 915,400
$ 28,600
$ 128,300
$ 134,600
$ 349,800
$ 88,100
$ 2,709,000
Gallon Cost

per gallon 0.04

10,000 400

8,000 320 Budget

8,000 350 Actual
(30) Unfavorable
BOSTON CREAMERY, Inc.
ICE CREAM DIVISION
Earnings Statement
December 31, 1973

Month Year-to-Date
Actual Flexible Budget Actual
Sales-Net
Manufacturing Cost (Exhibit 2) $ 6,824,900
Delivery (Schedule A-4) Note
Selling (Schedule A-5)
Administrative (Schedule A-6)
Year-to-Date
Flexible Budget

$ 6,725,900
 BOSTON CREAMERY, Inc.
ICE CREAM DIVISION
EXHIBIT 2
Schedule A-2
Manufacturing Cost of Goods Sold
December 31, 1973

Month Year-to-Date
Flexible
Actual Flexible Budget Actual Budget
Variable Costs
Dairy Ingredients $ 3,679,900 $ 3,648,500
Milk Price Variance $ 57,300 $ -
Sugar $ 599,900 $ 596,800
Sugar Price Variance $ 23,400 $ -
Flavoring (Incuding Fruits and Nuts) $ 946,800 $ 982,100
Cartons $ 567,200 $ 566,900
Plastic Wrap $ 28,700 $ 29,800
Additives $ 235,000 $ 251,000
Supplies $ 31,000 $ 35,000
Miscellaneous $ 3,000 $ 3,000
Subtotal $ 6,172,200 $ 6,113,100
Fixed Costs
Labor-Cartonizing and Freezing $ 425,200 $ 390,800
Labor-Other $ 41,800 $ 46,000
Repairs $ 32,200 $ 25,000
Depreciation $ 81,000 $ 81,000
Electricity and Water $ 41,500 $ 40,000
Spoilage $ 31,000 $ 30,000
Subtotal $ 652,700 $ 612,800
Total Costs $ 6,824,900 $ 6,725,900

99,000
Variance

31,400 U 31,400
57,300 U 57,300
3,100 U 3,100
23,400 U 23,400
(35,300)
300 U 300 misleading
(1,100)
(16,000)
(4,000)
-

34,400 U 34,400 efek positive ke delivery cost

(4,200)
7,200 U 7,200
-
1,500 U 1,500
1,000 U 1,000

99,000

198,000
STEP 1
VANILA ICE CREAM
Regular Premium
1-Gallon 1-Gallon
Paper Plastic
Container Container
Dairy Ingredients $ 0.53 $ 0.79
Sugar $ 0.15 $ 0.15
Flavor $ 0.10 $ 0.12
Production $ 0.10 $ 0.16
Warehouse $ 0.06 $ 0.08
Transportation $ 0.02 $ 0.025
Total Manufacturing $ 0.96 $ 1.325

Advertising $ 0.06 $ 0.06

Delivery $ 0.04 $ 0.04
Total Marketing $ 0.10 $ 0.10

Packaging $ 0.10 $ 0.25

Total Variable $ 1.16 $ 1.675
Selling Price $ 1.50 $ 2.40
Marginal Contribution per Gallon $ 0.34 $ 0.725

STEP 2
VANILA ICE CREAM SALES FORECAST IN GALLONS
January December Total

1 Gallon, Paper 100,000 100,000 1,200,000

1 Gallon, Plastic 50,000 50,000 600,000
2 Gallons, Paper 225,000 225,000 2,700,000
1 Gallon, Premium 120,000 120,000 1,440,000
495,000 495,000 5,940,000

STEP 4
THE PROFIT PLAN
Standard Marginal January
Contribution Gallons USD
1 Gallon, Paper $ 0.3400 100,000 $ 34,000
1 Gallon, Plastic $ 0.3050 50,000 $ 15,250
2 Gallons, Paper $ 0.2650 225,000 $ 59,625
1 Gallon, Premium $ 0.7250 120,000 $ 87,000
$ 0.3957 495,000 $ 195,875
Fixed Cost (see step 3)
Manufacturing Expense $ 20,612
Delivery Expense $ 32,004
Adm Expense $ 9,334
Selling Expense $ 12,667
Total Fixed Costs $ 74,617
Operating Profit $ 121,258

EXHIBIT A
JANUARY
ACTUAL STANDARD TOTAL
Galon Contribution Standard
Sales Per Gallon Contribution
1 Gallon, Paper 90,000 $ 0.3400 $ 30,600
1 Gallon, Plastic 95,000 $ 0.3050 $ 28,975
2 Gallons, Paper 245,000 $ 0.2650 $ 64,925
1 Gallon, Premium 90,000 $ 0.7250 $ 65,250
Total 520,000 $ 0.3649 $ 189,750
Forecasted at 495.000 gallons $ 195,875
Variance $ 6,125

Planned Actual Difference

Gallons 495,000 520,000 25,000
Contribution $ 195,875 $ 189,750 $ 6,125
Average Standard Contribution $ 0.3957 $ 0.3649 $ 0.0308

Variance due to volume

25,000 gallons F x 0,3957 $ 9,892.68 F

Variance due to Mix

0,0308 x 520,000 gallons $ 16,017.68 U

Total Variance $ 6,125.00 U

STEP 3
BUDGET FOR FIXED EXPENSES
January December Total
Manufacturing Expenses
Labor $ 7,280 $ 7,920 $ 88,000
Equipment repair $ 3,332 $ 3,348 $ 40,000
Depreciation $ 6,668 $ 6,652 $ 80,000
Taxes $ 3,332 $ 3,348 $ 40,000
Total $ 20,612 $ 21,268 $ 248,000
Delivery Expenses
Salaries-general $ 10,000 $ 10,000 $ 120,000
Salaries-drivers $ 10,668 $ 10,652 $ 128,000
Helpers $ 10,668 $ 10,652 $ 128,000
Supplies $ 668 $ 652 $ 8,000
Total $ 32,004 $ 31,956 $ 384,000
Administrative Expenses
Salaries $ 5,167 $ 5,163 $ 62,000
Insurance $ 1,667 $ 1,663 $ 20,000
Taxes $ 1,667 $ 1,663 $ 20,000
Depreciation $ 833 $ 837 $ 10,000
Total $ 9,334 $ 9,326 $ 112,000
Selling Expenses
Repair $ 2,667 $ 2,663 $ 32,000
Gasoline $ 5,000 $ 5,000 $ 60,000
Salaries $ 5,000 $ 5,000 $ 60,000
Total $ 12,667 $ 12,663 $ 152,000

Total Year

$ 408,000
$ 183,000
$ 715,500
$ 1,044,000
$ 2,350,500
 $ 248,000
$ 384,000
$ 112,000
$ 152,000
$ 896,000
$ 1,454,500

F
U
U
Frank's schedule:

Favorable Variance Due to Sales

Volume $ 117,700 F = standar contribution margin - forecasted standar profit margin
Price $ 12,000 F = (harga jual - harga standar) x volume penjualan / sales actual - sales r
$ 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

MARKET SHARE AND SIZE VARIANCE

Market size variance = (actual industy sales in units - budgeted industry sales in units) x (budg
= (12180000-11440000)*(5720329/11440000)*(2591300/5720329)
= $ 167,619 F

Market share variance = ((5968366/12180000)-(5720329/11440000))*12180000*(2591300/57

= -$ 55,259 U

Actual market share = 49%

Budgeted market share = 50%
Budgeted sales = 5,720,329
Actual sales = 5,968,366 248,037
Budgeted industry sales in units = 11,440,000
Actual industry sales in units = 12,180,000 740,000

Budgeted average unit contribution margin = $ 0.45

Market share variance = $ 55,259

SALES PRICE AND VOLUME VARIANCE

Sales price variance = (actual price - expected price) x quantity sold

= (9657300-9645300)
= $ 12,000 F

Sales volume variance = (actual volume - expected volume) x expected price

= (2709000-2591300)
= $ 117,700 F

CONTRIBUTION MARGIN AND MARGIN VOLUME VARIANCE

Contribution margin variance = actual contribution margin - budgeted contribution margin

Contribution margin volume variance = (actual quantity sold - budgeted quantity sold) x budgeted average uni

Variance Due to Sales

Sales volume variance

Budgeted Profit at Actual Volume

Standard Standard
Contribution Actual Contribution
Margin/Galon Gallon Sales 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 Chip $ 0.5359 164,377 $ 88,090
Total $ 0.4539 5,968,366 $ 2,709,000
Forecasted Standard Contribution (at 5.720.329 gallons) $ 2,591,300
Variance $ 117,700 F
Planned Actual Difference
Gallons 5,720,329 5,968,366 248,037 F
Contribution $ 2,591,300 $ 2,709,000 $ 117,700 F
Average Std. Contribution $ 0.4530 $ 0.4539 $ 0.0009 F

Variance Due to Volume

248.037 gallonsF x $ 0,4530 = $ 112,360 F
Variance Due to Mix
$ 0,0009F x 5.968.366 gallons = $ 5,340 F
Total Variance = $ 117,700 F

Sales price variance

Sales price variance = (actual price - expected price) x quantity sold
= (9657300-9645300)
= $ 12,000 F

Total Variance Due to Sales = $ 129,700 F

Variance Due to Operations

Actual Profit = $ 705,100 exc. price variance

Revised Profit Plan = $ 763,100
= $ 58,000 U
5,968,366 Gallons
Month Variance Due to
Actual Flexible Budget Operations
$ 6,824,900 $ 6,725,900 U $ 99,000 Manufacturing Cost
$ 706,800 $ 760,800 F -$ 54,000 Delivery
$ 607,700 $ 578,700 U $ 29,000 Advertising
$ 362,800 $ 368,800 F -$ 6,000 Selling
$ 438,000 $ 448,000 F -$ 10,000 Administrative
$ 8,940,200 $ 8,882,200 U $ 58,000

Variance Due to Operations REVISED Reclass to

Milk Price Variance $ 57,300 U Selling
Sugar Price Variance $ 23,400 U Selling
Labor-Cartonizing and Freezing * $ 34,400 U Delivery
* memberi efek positive terhadap delivery cost
Month Variance Due to
Actual Flexible Budget Operations
$ 6,824,900 $ 6,725,900 F -$ 16,100 Manufacturing Cost
$ 706,800 $ 760,800 F -$ 19,600 Delivery
$ 607,700 $ 578,700 U $ 29,000 Advertising
$ 362,800 $ 368,800 U $ 74,700 Selling
$ 438,000 $ 448,000 F -$ 10,000 Administrative
$ 8,940,200 $ 8,882,200 U $ 58,000
Variance Due to Operations REVISED alternative 2 Reclass to
Milk Price Variance $ 57,300 U Selling
Sugar Price Variance $ 23,400 U Selling
Labor-Cartonizing and Freezing * $ 54,000 U Delivery
* memberi efek positive terhadap delivery cost
Month Variance Due to
Actual Flexible Budget Operations
$ 6,824,900 $ 6,725,900 F -$ 35,700 Manufacturing Cost
$ 706,800 $ 760,800 F $ - Delivery
$ 607,700 $ 578,700 U $ 29,000 Advertising
$ 362,800 $ 368,800 U $ 74,700 Selling
$ 438,000 $ 448,000 F -$ 10,000 Administrative
$ 8,940,200 $ 8,882,200 U $ 58,000

BOSTON CREAMERY, Inc.

ICE CREAM DIVISION
Analysis of Variance
Sales and Marketing Department:
Sales $ 129,700 F
Marketing $ 6,000 F
Advertising $ 29,000 U
Sub Total Variance $ 106,700 F
Manufacturing and Operations Department:
Manufacturing $ 99,000 U
Delivery $ 54,000 F
Administration $ 10,000 F
Sub Total Variance $ 35,000 U
Total Variance $ 71,700 F
standar profit margin
jualan / sales actual - sales revised budget

dustry sales in units) x (budgeted market share %) x (budgeted average unit contribution margin)
00)*(2591300/5720329)

0))*12180000*(2591300/5720329)

ribution margin

old) x budgeted average unit contribution margin

 Standard
Contribu
Forecasted Actual tion Sales
Gallon Gallon Margin/G Sales Mix Volume
Sales Sales actual mix budgeted mix alon Variance Variance

Vanilla 2,409,854 2,458,212 0.411874 0.421278916 $ 0.4329 (24,301) 45,235

Chocolate 2,009,061 2,018,525 0.338204 0.3512142396 $ 0.4535 (35,214) 39,506
Walnut 48,883 50,124 0.008398 0.0085454875 $ 0.5713 (502) 1,211
Buttercrunch 262,185 268,839 0.045044 0.0458339022 $ 0.4771 (2,249) 5,424
Cherry Swirl 204,774 261,240 0.043771 0.0357975914 $ 0.5153 24,522 4,575
Strawberry 628,560 747,049 0.125168 0.1098817918 $ 0.4683 42,725 12,763
Pecan Chip 157,012 164,377 0.027541 0.0274480716 $ 0.5359 298 3,648
Total 5,720,329 5,968,366 5,279 112,363
117,642
5339.631