Variance Analysis

BY Group 5
Wei Liu
Susanne van der Meer
Hayner Esteves
Lucas Boerma

Group 5
11 June 2013
SEM 2013

Table of Contents
Introduction: .............................................................................................................................................................................................................................................................. 2
Variance Analysis 2012.4 ................................................................................................................................................................................................................................. 3
Variance Analysis 2013.1 ................................................................................................................................................................................................................................. 5
Variance Analysis adjusted discount. 2012.4 .................................................................................................................................................................................................. 7
Variance Analysis adjusted discount. 2013.1 .................................................................................................................................................................................................. 8
In depth price explanations. ............................................................................................................................................................................................................................ 9

Introduction:
In this report we will cover the analysis as to why there are deviations between the planned budget and the actual budget, known as the variance analysis. We have
done this for the Q4 of 2012 and Q1 of 2013, based on the values from the annual report.
Here are the budgets again that we have created in the previous report.

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Variance Analysis 2012.4

MUCS
Gross Selling Price
Discount
Net price
Net Sales

Bud. Q Act Q
Act. P
Act. Disc. Ex. Rate Act. Sugar. Act. Conce. O. Variab UVC act FOC-ACT
all ACT
57,82
57,44
57,44
57,44
57,44
57,44
57,44
57,44
57,44
57,44
57,44
10,26
10,26
10,96
10,96
10,96
10,96
10,96
10,96
10,96
10,96
10,96
0,25
0,25
0,25
2,74
2,74
2,74
2,74
2,74
2,74
2,74
2,74
10,01
10,01
10,71
8,22
8,22
8,22
8,22
8,22
8,22
8,22
8,22
578,78 574,97 615,18
472,16
472,16
472,16
472,16
472,16
472,16
472,16
472,16

Ex. Rate
Sugar US$
Concentrate
Other vars

2,09
19,85
37,18
184,76

2,09
19,85
37,18
184,76

2,09
19,85
37,18
184,76

2,09
19,85
37,18
184,76

2,09
19,85
37,18
184,76

2,09
19,30
37,18
184,76

2,09
19,30
90,11
184,76

2,09
19,30
90,11
185,56

2,09
19,30
90,11
185,56

2,09
19,30
90,11
185,56

2,09
19,30
90,11
185,56

UVC $
Total var. Cost
Gross Margin.
Fixed Overhead

4,56
263,43
315,35
114,29

4,59
263,43
311,55
114,29

4,59
263,43
351,76
114,29

4,59
263,43
208,73
114,29

4,59
263,43
208,73
114,29

4,57
262,27
209,89
114,29

5,49
315,20
156,96
114,29

5,50
316,00
156,16
114,29

4,47
256,53
215,63
114,29

4,47
256,53
215,63
129,50

4,47
256,53
215,63
129,50

Operational Income

201,06

197,26

237,47

94,44

94,44

95,60

42,67

41,87

101,34

86,13

86,13

Table 1 - Variance analysis 2012.4

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This table cover s the variance analysis of the final period of 2012 between our budgets and the actual sales data. A large difference between the budget and the
actual data can be seen, and this difference can be related to several factors. Namely:
- Difference in Gross Selling Price. Our selling price was based on the historic data retrieved from SAP where the values are different from the actuals. 2012Q4
had a selling price of 10,25 for example.
- A large difference in the discount rates. Again, based on historic data from SAP. We are unsure which of these two values is correct which is why we have
added another set of tables down below with the truncated discount values.
- These two values combined result in a largely lower net price resulting in a lower net sales.
-

Our concentrate cost was far lower than the actual value because these are based on a calculation factor provided by the teacher. We believe this value to be
closer to 1.2 rather than the 0.65.
This concentrate cost led to a higher UVC. Combined with the net sales this leads to a severely lower gross margin than we budgeted.
Finally a difference in overhead costs leads to an even lower operational income.

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Variance Analysis 2013.1

MUCS
Gross Selling Price
Discount
Net price
Net Sales
Ex. Rate
Sugar US$
Concentrate
Other vars
UVC $
Total var. Cost
Gross Margin.
Fixed Overhead
Operational Income

Act. Conce.O. Variab UVC act FOC-ACT all ACT

Act. P Act. Disc. Ex. Rate Act. Sugar.
Bud. Q Act Q
57,44
57,44
57,44 57,44
57,44
57,44 57,44
57,44
57,44 57,44
57,82
11,03
11,03
11,03 11,03
11,03
11,03 11,03
11,03
10,26 11,03
10,26
2,76
2,76
2,76
2,76
2,76
2,76
2,76
2,76
0,25
0,25
0,25
8,27
8,27
8,27
8,27
8,27
8,27
8,27
8,27
10,01 10,78
10,01
475,03 475,03
475,03 475,03
475,03
475,03 475,03
578,78 574,97 619,20 475,03
2,07
19,65
37,58
186,76
4,58
265,02
313,76
108,28
205,48

2,07
19,65
37,34
187,76
4,63
265,77
309,20
108,28
200,92

2,07
19,65
37,34
188,76
4,64
266,77
352,43
108,28
244,15

2,07
19,65
37,34
189,76
4,66
267,77
207,26
108,28
98,98

2,09
19,65
37,34
189,76
4,67
268,16
206,86
108,28
98,58

2,09
15,71
37,34
189,76
4,53
259,94
215,09
108,28
106,81

2,09
15,71
73,11
189,76
5,15
295,71
179,32
108,28
71,04

2,09
15,71
73,11
150,58
4,47
256,53
218,50
108,28
110,22

2,09
15,71
73,11
150,58
4,47
256,53
218,50
108,28
110,22

2,09
15,71
73,11
150,58
4,47
256,53
218,50
140,00
78,50

2,09
15,71
73,11
150,58
4,47
256,53
218,50
140,00
78,50

Table 2 Variance Analysis 2013.1

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This table cover s the variance analysis of the first period of 2013 between our budgets and the actual sales data. A large difference between the budget and the
actual data can be seen, and this difference can be related to several factors. Namely:
- Difference in Gross Selling Price. Our selling price was based on the historic data retrieved from SAP where the values are different from the actuals. 2012Q4
had a selling price of 10,25 for example.
- A large difference in the discount rates. Again, based on historic data from SAP. We are unsure which of these two values is correct which is why we have
added another set of tables down below with the truncated discount values.
- These two values combined result in a largely lower net price resulting in a lower net sales.

Our concentrate cost was far lower than the actual value because these are based on a calculation factor provided by the teacher. We believe this value to be
closer to 1.2 rather than the 0.65.
Also there is a massive drop in the other variable costs that we did not forecast. We believed that these costs would follow the same pattern as previous
periods/years.
This concentrate cost led to a higher UVC. Combined with the net sales this leads to a severely lower gross margin than we budgeted.
Finally a difference in overhead costs leads to an even lower operational income.

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Variance Analysis adjusted discount. 2012.4

Bud. Q

Act Q

Act. P

Act. Disc. Ex. Rate

Act. Sugar.Act. Conce. O. Variab

UVC act FOC-ACT

all ACT

MUCS
Gross Selling Price
Discount
Net price
Net Sales

57,82
10,26
0,25
10,01
578,78

57,44
10,26
0,25
10,01
574,97

57,44
11,03
0,25
10,78
619,20

57,44
11,03
0,27
10,76
617,82

57,44
11,03
0,27
10,76
617,82

57,44
11,03
0,27
10,76
617,82

57,44
11,03
0,27
10,76
617,82

57,44
11,03
0,27
10,76
617,82

57,44
11,03
0,27
10,76
617,82

57,44
11,03
0,27
10,76
617,82

64,90
10,96
0,27
10,69
693,52

Ex. Rate
Sugar US$
Concentrate
Other vars

2,09
19,85
37,18
184,76
4,56
263,43
315,35
114,29
201,06

2,09
19,85
37,18
184,76
4,59
263,43
311,55
114,29
197,26

2,09
19,85
37,18
184,76
4,59
263,43
355,78
114,29
241,49

2,09
19,85
37,18
184,76
4,59
263,43
354,40
114,29
240,11

2,09
19,85
37,18
184,76
4,59
263,43
354,40
114,29
240,11

2,09
19,30
37,18
184,76
4,57
262,27
355,55
114,29
241,26

2,09
19,30
90,11
184,76
5,49
315,20
302,62
114,29
188,33

2,09
19,30
90,11
185,56
5,50
316,00
301,82
114,29
187,53

2,09
19,30
90,11
185,56
4,47
256,53
361,29
114,29
247,00

2,09
19,30
90,11
185,56
4,47
256,53
361,29
129,50
231,79

2,09
19,30
90,11
185,56
3,95
256,53
436,99
129,50
307,49

UVC $
Total var. Cost
Gross Margin.
Fixed Overhead
Operational Income

Table 3 - Variance Analysis adjusted discount. 2012.4

For the actual discount, we encountered that the value presented in the PDF file provided by the teacher, had a difference from the data retrieved from SAP. We think
that the discount is not 2.74, but 0.274. And then the Variance Analysis turn out as you can see on Table 3.

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Variance Analysis adjusted discount. 2013.1

MUCS
Gross Selling Price
Discount
Net price
Net Sales
Ex. Rate
Sugar US$
Concentrate
Other vars
UVC $
Total var. Cost
Gross Margin.
Fixed Overhead
Operational Income

Bud. Q Act Q
Act. P Act. Disc. Ex. Rate Act. Sugar.
Act. Conce.O. Variab UVC act FOC-ACT all ACT
57,82
57,44 57,44
57,44
57,44 57,44
57,44
57,44 57,44
57,44
57,44
10,26
10,26 11,03
11,03
11,03 11,03
11,03
11,03 11,03
11,03
11,03
0,25
0,25
0,25
0,28
0,28
0,28
0,28
0,28
0,28
0,28
0,28
10,01
10,01 10,78
10,75
10,75 10,75
10,75
10,75 10,75
10,75
10,75
578,78 574,97 619,20 617,71
617,71 617,71
617,71
617,71 617,71
617,71 617,71
2,07
19,65
37,58
186,76
4,58
265,02
313,76
108,28
205,48

2,07
19,65
37,34
187,76
4,63
265,77
309,20
108,28
200,92

2,07
19,65
37,34
188,76
4,64
266,77
352,43
108,28
244,15

2,07
19,65
37,34
189,76
4,66
267,77
349,94
108,28
241,66

2,09
19,65
37,34
189,76
4,67
268,16
349,55
108,28
241,27

2,09
15,71
37,34
189,76
4,53
259,94
357,77
108,28
249,49

2,09
15,71
73,11
189,76
5,15
295,71
322,00
108,28
213,72

2,09
15,71
73,11
150,58
4,47
256,53
361,18
108,28
252,90

2,09
15,71
73,11
150,58
4,47
256,53
361,18
108,28
252,90

2,09
15,71
73,11
150,58
4,47
256,53
361,18
140,00
221,18

2,09
15,71
73,11
150,58
4,47
256,53
361,18
140,00
221,18

Table 4 - Variance Analysis adjusted discount. 2013.4

For the actual discount, we encountered that the value presented in the PDF file provided by the teacher, had a difference from the data retrieved from SAP. We think
that the discount is not 2.76, but 0.276. And then the Variance Analysis turn out as you can see on Table 4.

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In depth price explanations.

Concentrate
o The concentrate were calculates from the MUCs sold. The constant (0.65) from the concentrate. However, we dont agree with that value, we think
that this value should be around 1.2
Sugar Price
o The difference in amount of sugar bought by Andina is different because we thought that Andina were not using sugar on their components any more.
Since the 80`s Coca-Cola does not uses sugar anymore and the bottles are made of recycled material.
Other Variables
o The difference on that is because we thought that, as the recycling mentality on Brazil is evolving fast, the need for the raw material would be smaller,
since more and more material is being recycled.
Marketing
o Since the 4Q of 2012 were Christmas time, and there is a lot of advertising on that period, on the 1Q of 2013 we would expect the company to not
spend as much money on that as on the last quarter, so we decided by a drop not an increase.
Other fixed expenses
o Following the pattern from the previous quarters we expected the other expenses to go ever lower, not higher.
Discount
o The discount have been the same for almost 3 years we did not expect changes on that.
Net price
o Following the rise of the GDP, we expected a rise on the price, but not a big one, we expected it to go up around the same amount as the GDP.
Net sales
o Since we expected that the MUC`s were going down and the net price would be just a little bit higher we expected the net sales price to be lower than
the last quarter, which did not happen and gave a difference.
Gross Margin
o The gross margin is a close hit, because our total variable cost were budgeted lower than the actual along with the net sales (also lower than actual)
which made the gross margin be.
Operational profit
o The general profit that we have budgeted was higher than the actuals, because we budgeted the fixed expenses lower than the actual. Reasons
explained before.
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Exchange rate
o While we make variance budget we realize exchange rate were not change between 2012 and 2013.

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