Compare and evaluate each of the three businesses using variance analysis. Please interpret variances and discuss the impacts of weather, market share, product price, and transfer pricing. (i.e., comparing budgets based on actual temperature, budgets based on projected temperature, and actual results may help to evaluate the impact of weather; flexible budgets based on actual sales volumes may help to evaluate operating efficiency)
Exhibit 2 French Region, 2009 Results Profit Plan Actual Variance Volume Euros Euros ('000) Volume ('000) ('000) ('000) 4,010 17,879 3,661 4,618 405 20,005 3,377 445 2, 126 (284) 79 1,921 c U 79 4,455 21,540 5,023 23,461 F U 2,887 1,844 38.29 7,893 2,841 371 3,317 2,047 43.56 9,142 3,186 438 (1,249) (345) (67) F 410 316 40.03 368 298 36.02 106 38 1,121 693 388 8,233 F 1,015 655 362 8,663 26 F 430 F (118) U Sales Data Sales ice-cream (volume in litres) Sales specialties (litres) Revenue from distribution Total Sales Cost of Goods Sold Cost ice-cream Dairy ingredients (litres) Other ingredients (100 gr.) Labor (hours) Cost specialties Dairy ingredients (litres) Other ingredients (100 gr.) Labor (hours) Contribution margin Other Costs Supervision, energy, maintenance, ... Depreciation Operating margin Selling and Administrative Expenses Delivery expenses Depreciation of trucks Selling expenses Advertising Administrative salaries and expenses Allocated central office expenses Profits before Interest and Taxes Identifiable Assets Cash (average) Accounts Receivable (average) Plant and equipment (net of depreciation 2,322) Total identifiable assets Conditions for tourism Average summer temperature 2,206 467 5,560 2,324 467 5,872 312 F U 861 507 1,078 1,141 788 158 1,027 908 510 1,139 1,070 810 193 (47) (3) (61) 71 (22) (35) 215 1,242 94 141 (47) (54) 580 4,713 5,387 634 4,726 5,501 (13) (141) 29.8 C 29.2C Exhibit 3 Italian Region, 2009 Results Profit Plan Actual Variance Volume ('000) Euros ('000) Volume ('000) Euros ('000) 139 F 2,453 272 2,725 10,967 2,232 13,199 2,480 276 2,756 11,106 2,253 13,359 F 21 160 F 1,864 1,275 33.10 4,963 1,885 300 1,895 1, 296 36.03 4,986 1,932 328 (23) (47) (28) ccc F 259 196 24.24 689 425 220 4,717 257 197 23.29 676 430 212 4,795 13 (5) 8 TTC F 78 7 F Sales Data Sales ice-cream (volume in litres) Sales specialties (litres) Total Sales Cost of Goods Sold Cost ice-cream Dairy ingredients (litres) Other ingredients (100 gr.) Labor (hours) Cost specialties Dairy ingredients (litres) Other ingredients (100 gr.) Labor (hours) Contribution margin Other Costs Supervision, energy, maintenance, ... Depreciation Operating margin Selling and Administrative Expenses Delivery expenses Depreciation of trucks Selling expenses Advertising Administrative salaries and expenses Rent Allocated central office expenses Profits before Interest and Taxes Identifiable Assets Cash (average) Accounts Receivable (average) Plant and equipment (net of depreciation 3,200) Total identifiable assets Conditions for tourism Average summer temperature 1,142 109 3,466 1,135 109 3,551 85 TI 329 14 315 198 198 314 1,328 558 344 1,288 574 (30) 40 (16) 122 122 158 193 (35) 459 517 58 94 377 108 357 2,764 3,229 (14) 20 (1) 5 2,763 3,234 29.7 C 29.8 C Exhibit 4 Spanish Region, 2009 Results Profit Plan Actual Variance Euros Volume ('000) Volume Euros ('000) ('000) ('000) 15,507 3,685 409 4,094 16,294 3,330 19,624 3,575 400 3,975 3,251 (787) (79) (866) 18,758 F 2,653 1,769 34.37 6,923 2,670 279 2,175 1,450 29.21 5,607 2,202 238 1,316 468 41 TITITI 381 299 37.09 994 633 362 275 34.73 933 571 283 8,924 61 62 18 1,100 301 F F 7,824 2,166 (21) ) U 2,145 391 - 391 2,126 4,241 (2,126) (1,047) 5,288 Sales Data Sales ice-cream (volume in litres) Sales specialties (litres) Total Sales Cost of Goods Sold Cost ice-cream Dairy ingredients (litres) Other ingredients (100 gr.) Labor (hours) Cost specialties Dairy ingredients (litres) Other ingredients (100 gr.) Labor (hours) Contribution margin Other Costs Supervision, energy, maintenance, ... Depreciation Transfer from France Operating margin Selling and Administrative Expenses Delivery expenses Depreciation of trucks Subcontracted transportation Selling expenses Advertising Administrative salaries and expenses Rent Allocated central office expenses Profits before Interest and Taxes Identifiable Assets Cash (average) Accounts Receivable (average) Plant and equipment (net of depreciation 1,669) Total identifiable assets Conditions for tourism Average summer temperature 736 758 424 413 (22) (11) (77) 77 41 F 786 1,408 827 1,406 620 100 U (2) (24) 644 U 100 158 193 (35) (1,177) 1,028 (149) 94 98 (4) 423 156 266 4,837 4,764 5,281 (73) 80 5,201 30.2C 28.5 C
