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Revenue Variance Example

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                                                                                                                                                                                        © Kristoffer Burnett - Certified Management Accountant, 2009-2011
                                                                                                                                                                                              Small business solutions at http://www.imperoco.com
                Revenue Variance Example

                                       Item1         Item2             Item3         Item4         Item5      Totals
      Budget Comparison

Budgeted sales price/unit          $   155.00 $         267.00 $       157.00 $      261.00 $      102.00
Budgeted unit sales                    14,790           12,853         24,311        12,395        31,021       95,370
Budgeted mix percentage                 15.5%            13.5%          25.5%         13.0%         32.5%       100.0% The percentage of total budgeted unit sales for each item
Budgeted market size                   41,780           20,831         48,428        21,261        57,129      189,429 Total budgeted unit sales for the entire market
Budgeted market share                   35.4%            61.7%          50.2%         58.3%         54.3%

Actual sales price/unit            $   171.00 $         282.00 $       178.00 $      263.00 $      113.00
Actual unit sales                      13,826           10,377         23,354        10,817        27,178       85,552
Actual mix percentage                   16.2%            12.1%          27.3%         12.6%         31.8%       100.0% The percentage of total actual unit sales for each item
Actual market size                     41,149           14,625         49,491        16,867        53,819      175,951 Total actual unit sales for the entire market
Actual market share                     33.6%            71.0%          47.2%         64.1%         50.5%


    Actual Budget Variance

Difference in sales price          $    16.00    $       15.00     $    21.00    $     2.00    $    11.00                  Actual sales price/unit - Budgeted sales price/unit
Actual unit sales                      13,826           10,377         23,354        10,817        27,178
Flexible budget variance           $ 221,216     $     155,655     $ 490,434     $   21,634    $ 298,958 $ 1,187,897       This is the impact on total sales due to a difference in item sales prices
Difference in unit sales                 (964)          (2,476)          (957)       (1,578)       (3,843)                 Actual unit sales - Budgeted unit sales
Budgeted sales price/unit          $ 155.00      $      267.00     $ 157.00      $ 261.00      $ 102.00
Sales volume variance              $ (149,420)   $    (661,092)    $ (150,249)   $ (411,858)   $ (391,986) $ (1,764,605)   This is the impact on total sales due to a difference in unit sales

Actual budget variance             $   71,796    $    (505,437) $ 340,185        $ (390,224) $ (93,028) $     (576,708) Flexible budget variance + Sales volume variance


    Sales Volume Variance
         Breakdown 1

Difference in budgeted mix units       (1,529)          (1,303)        (2,495)       (1,273)       (3,217)                 (Actual (total) unit sales * Budgeted mix percentage) - Budgeted unit sales
Budgeted sales price/unit          $ 155.00      $      267.00     $ 157.00      $ 261.00      $ 102.00
Sales quantity variance            $ (236,995)   $    (347,901)    $ (391,715)   $ (332,253)   $ (328,134) $ (1,636,998)   This is the impact on total sales due to a difference in total unit sales
Difference in actual mix units            565           (1,173)         1,538          (305)         (626)                 Actual unit sales - (Actual (total) unit sales * Budgeted mix percentage)
Budgeted sales price/unit          $ 155.00      $      267.00     $ 157.00      $ 261.00      $ 102.00
Sales mix variance                 $ 87,575      $    (313,191)    $ 241,466     $ (79,605)    $ (63,852) $ (127,607)      This is the impact on total sales due to a difference in mix percentage

Total sales volume variance        $ (149,420) $      (661,092) $ (150,249) $ (411,858) $ (391,986) $ (1,764,605) Sales quantity variance + Sales mix variance


    Sales Volume Variance
         Breakdown 2

Difference in market size                (223)           (3,829)          534        (2,562)       (1,797)                 (Actual market size - Budgeted market size) * Budgeted market share
Budgeted sales price/unit          $ 155.00      $       267.00    $   157.00    $ 261.00      $ 102.00
Market size variance               $ (34,565)    $   (1,022,343)   $   83,838    $ (668,682)   $ (183,294) $ (1,825,046)   This is the impact on total sales due to a difference in market size
Difference in market share               (741)            1,353        (1,491)          984        (2,046)                 Actual market size * (Actual market share - Budgeted market share)
Budgeted sales price/unit          $ 155.00      $       267.00    $ 157.00      $ 261.00      $ 102.00
Market share variance              $ (114,855)   $      361,251    $ (234,087)   $ 256,824     $ (208,692) $     60,441    This is the impact on total sales due to a difference in market share

Total sales volume variance        $ (149,420) $      (661,092) $ (150,249) $ (411,858) $ (391,986) $ (1,764,605) Market size variance + Market share variance


        ITEM TO CHART:                 Item4     Dropdown menu


                                                                                                                              Sales Volume Variance Breakdown 1
  $50,000                          Actual Budget Variance

         $0
                                                                                                                                       ($79,605)


 ($50,000)


($100,000)
                                                                                                                                                    ($332,253)


($150,000)


($200,000)
                                                                                                                       Sales quantity variance            Sales mix variance

                                                                                                                              Sales Volume Variance Breakdown 2
($250,000)


($300,000)
                                                                                                                                     $256,824

($350,000)


                                                                                                                                                      ($668,682)
($400,000)


($450,000)
                                                        Item4
       Flexible budget variance            Sales volume variance               Actual budget variance
                                                                                                                       Market size variance           Market share variance

				
DOCUMENT INFO
Description: Revenue variance analysis is the process of understanding why actual revenue results were different from budgeted amounts. Factors such as price, volume, mix, and market size/share are examined.
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