The spreadsheet presents the variance analysis and traces the root of the variance to allow for better financial control.

1. Budgeted
Veneer CD Rack Mahogany CD Rack Total
Units Sold 1300 1500 2800
Revenues 97500 300000 397500
Variable Costs
Direct Materials 26000 75000 101000
Direct Labor 15600 30000 45600
Variable Overhead 11700 22500 34200
Packaging 9750 11250 21000
Total Variable Costs 63050 138750 201800
Contribution Margin 34450 161250 195700
Fixed Manufacturing Costs 35000
Operating Income 160700

2. Standard Costs Per Unit Standard Requirements per unit
Veneer Mahogany Veneer
Selling Price 75 200
Wood 15 45 Wood Sheet(Sheet & Foot) 0.5
Rack Insert 5 5 Rack Insert(Units) 1
Packaging 7.5 7.5 Packaging(Kgs) 1
Labour 12 20 Labour(Hrs) 3
Variable Overhead 9 15
Total Variable cost 48.5 92.5

3. Standard Rates
Mahogany Veneer Mahogany
9 Wood Sheet(Sheet & Foot) 30 5
1 Rack Insert(Units) 5 5
1 Packaging(Kgs) 7.5 7.5
5 Labour(Hrs) 4 4

4. Actual
Veneer CD RackMahogany CD Rack
Total
Units Sold 1000 1700 2700
Revenues 70000 357000 427000
Variable Costs
Direct Materials 22600 105850 128450
Direct Labor 15000 42500 60000
Variable Overhead 18000 18000 36000
Packaging 7881.48 13398.52 21280
Total Variable Costs 63481.48 179748.52 245730
Contribution Margin 6518.52 177251.48 181270
Fixed Manufacturing Costs 40000
Operating Income 141270

5. Actual Costs Per Unit Actual Requirements per unit
Veneer Mahogany Veneer Mahogany
Selling Price 70 210
Wood 19.6 59.26 Wood Sheet(Sheet & Foot)0.7 9.12
Rack Insert 3 3 Rack Insert(Units) 1 1
Packaging 7.88 7.88 Packaging(Kgs) 1.04 1.04
Labour 15 25 Labour(Hrs) 3 5
Variable Overhead 9 15
Total Variable cost 54.48 110.15

6. Actual Rates
Veneer Mahogany
Wood Sheet(Sheet & Foot) 28 6.5
Rack Insert(Units) 3 3
Packaging(Kgs) 7.6 7.6
Labour(Hrs) 5 5

7. Variance Analysis
Income Statement
Budgeted Actual Variance
Units Sold 2800 2700 -100 U
Revenues 397500 427000 29500 F
Variable Costs
Direct Materials 101000 128450 27450 U
Direct Labor 45600 60000 14400 U
Variable Overhead 34200 36000 1800 U
Packaging 21000 21280 280 U
Total Variable Costs 201800 245730 43930 U
Contribution Margin 195700 181270 -14430 U
Fixed Manufacturing Costs 35000 40000 5000 U
Operating Income 160700 141270 -19430 U

8. Actual Rates Standard Rates
Veneer Mahogany Veneer Mahogany
Wood Sheet(Sheet & Foot) 6.5
28 Wood Sheet(Sheet & Foot)
30 5
Rack Insert(Units)
3 3 Rack Insert(Units) 5 5
Packaging(Kgs) 7.6 7.6 Packaging(Kgs) 7.5 7.5
Labour(Hrs) 5 5 Labour(Hrs) 4 4
1 2
Actual Input Quantity x Actual Rate Actual Input Quantity x Budgeted Rate
Veneer Mahogany Veneer Mahogany
Wood Sheet(Sheet & Foot) 59.26
19.6 Wood Sheet(Sheet & Foot)
21 45.59
Rack Insert(Units)
3 3 Rack Insert(Units) 5 5
Packaging(Kgs) 7.88 7.88 Packaging(Kgs) 7.78 7.78
Labour(Hrs) 15 25 Labour(Hrs) 12 20

9. Actual Requirements per unit
Veneer Mahogany
Wood Sheet(Sheet & Foot)
0.7 9.12
Rack Insert(Units) 1 1
Packaging(Kgs) 1.04 1.04
Labour(Hrs) 3 5
(2)-(1)
Spending Variance
Veneer Mahogany
Wood Sheet(Sheet & Foot)
1.4 F -13.68 U
Rack Insert(Units) 2 F 2 F
Packaging(Kgs) -0.1 U -0.1 U
Labour(Hrs) -3 U -5 U

10. Actual Costs Per Unit Standard Costs Per Unit
Veneer Mahogany Veneer
Wood 19.6 59.26 Wood 15
Rack Insert 3 3 Rack Insert 5
Packaging 7.88 7.88 Packaging 7.5
Labour 15 25 Labour 12
1 2
Actual Input Quantity x Actual Cost Price Actual Input Quantity x Budgeted Cost Price
Veneer Mahogany Veneer
Wood Sheet(Sheet & Foot)
13.72 540.35 Wood Sheet(Sheet & Foot) 10.5
Rack Insert(Units) 3 3 Rack Insert(Units) 5
Packaging(Kgs) 8.17 8.17 Packaging(Kgs) 7.78
Labour(Hrs) 45 125 Labour(Hrs) 36

11. Actual Requirements per unit
Mahogany Veneer Mahogany
45 Wood Sheet(Sheet0.7Foot) 9.12
&
5 Rack Insert(Units) 1 1
7.5 Packaging(Kgs) 1.04 1.04
20 Labour(Hrs) 3 5
(2)-(1)
dgeted Cost Price Price Variance
Mahogany Veneer Mahogany
410.29 Wood Sheet(Sheet & Foot)
-3.22 F -130.06 F
5 Rack Insert(Units) 2 U 2U
7.78 Packaging(Kgs) -0.4 F -0.4 F
100 Labour(Hrs) -9 F -25 F

12. Budgeted
Veneer CD Rack Mahogany CD Rack Total
Units Sold 1000 1700 2700
Revenues 75000 340000 415000
Variable Costs
Direct Materials 20000 85000 105000
Direct Labor 12000 34000 46000
Variable Overhead 9000 25500 34500
Packaging 7500 12750 20250
Total Variable Costs 48500 157250 205750
Contribution Margin 26500 182750 209250
Fixed Manufacturing Costs 35000
Operating Income 174250

13. Standard Costs Per Unit Standard Requirements per unit
Veneer Mahogany Veneer
Selling Price 75 200
Wood 15 45 Wood Sheet(Sheet & Foot) 0.5
Rack Insert 5 5 Rack Insert(Units) 1
Packaging 7.5 7.5 Packaging(Kgs) 1
Labour 12 20 Labour(Hrs) 3
Variable Overhead 9 15
Total Variable cost 48.5 92.5

14. Standard Rates
Mahogany Veneer Mahogany
9 Wood Sheet(Sheet & Foot) 30 5
1 Rack Insert(Units) 5 5
1 Packaging(Kgs) 7.5 7.5
5 Labour(Hrs) 4 4