Page 185 - DMGT514_MANAGEMENT_CONTROL_SYSTEMS

Management Control Systems

Notes


Case Study Variance Analysis Problem of ABC Company

I n this case, you are asked to analyse the February and March financial performance of
the Temple Division of the ABC Company as compared with its budget,

Part A - February 2007
Below are the data describing the actual financial results of the Temple Division for the
month of February 2007.

Sales `. 781
Variable cost of sales 552
Contribution 229
Fixed manufacturing costs 80
Gross Profit 149
Selling expense 57
Administrative expense 33
Net profit ` 59
Sales

Product Unit Sales Price Sales in Rupees
A 120 ` 0.95 114
B 130 1.90 247
C 150 2.80 420
Total 400 781

Production
Manufacturing Cost
Product Units Material Labour Variable Total
produced Overhead
A 150 80 20 40 140
B 130 91 21 35 147
C 120 190 15 30 235
Total 400 361 56 105 522

Units (000)
Product A 600
Product B 650
Product C 1500

Part B - March 2007

Below are the data describing the actual financial results for the Temple Division for the
month of March 2007.

Contd...

180 LOVELY PROFESSIONAL UNIVERSITY