Variance Analysis for Circuit Production Costs

Extract

[...] On the other hand, when analyzing direct charges, it is observed that the actual direct charges are lower than the expected direct charges, and this is by 479.5 euros. This is explained in particular by the smaller number of participants than expected. In fact, this is notably observed through the number of meals. During the 7-day circuits with 12 people (per circuit), the company must count 252 meals. In our case, we were at 231 meals served. [...]

[...] To best understand its charges, the company must therefore take several factors into account. The company should estimate its charges per participant and not per circuit, so it would simply have to estimate the number of monthly participants. The second important point is the negotiation of tariffs with its partners. Negotiating fixed tariffs based on the number of clients brought in would be more interesting and less random for charge forecasts. [...]

[...] Total variance = Actual Cost of 7 circuits - Budgeted Cost of 7 circuits 15 925 - 15 246 = 679 This calculation allows us to analyze the difference between the budgeted and actual cost of 7 circuits, we notice that the difference is less important than our first calculation, however, this one is more annoying because the generated revenues are the same and can be less important if the buses are not full. We realize that the cost analysis via the base tariffs was underestimated. In order to best predict its costs, the company has every interest in negotiating fixed rates with its service providers. [...]

[...] Production Costs and Charges - Terroirs and Vineyards I. Calculate the real production cost of realization of the 7 circuits Q PU Amount Nuitées 77 75 5 775 Meals 231 17 3 927 Visits-Tastings 77 18,5 1 424,5 Accompagnateur 7 250 1 750 Centre « Design » 1 623 623 Centre « Transport » 1 2 425,5 2425,5 Cost of the 7 circuits 15 925 The actual production cost of the realization of the 7 circuits is equal to 15925 euros. II. Present a comparison sheet to highlight the different discrepancies It is planned for a normal monthly activity to carry out 5 circuits, that is, if we refer to the normal bases participants: Amount Nuitées 12 x 5 65 3 900 Meals 36 x 5 18 3 240 Tastings Visits 12 x 5 20 1 200 Accompagnateur 1 x 5 240 1 200 Centre « Conception » 1 x 5 90 450 Centre « Transport » 180 x 5 1,50 1350 Cost of the 7 circuits 11 340 It is observed that the actual cost for 7 circuits is different from the estimated cost. [...]

[...] Proceed to the analysis of variances on direct charges and indirect charges 5 circuits - Monthly activity forecast 7 circuits - According to forecasted costs 7 circuits - Real costs Nuitées 3 900 5 460 5 775 Meals 3 240 4 536 3 927 Tastings-Visits 1 200 1 680 1 424,5 Accompagnateur 1 200 1 680 1 750 Direct Charges 9540 13 356 12876,5 Centre « Design » 450 623 623 Centre « Transport » 1350 1890 2425,5 Indirect Charges 1800 2513 3048,5 Total Cost 11 340 15 246 15 925 In this table, direct charges are in blue and indirect charges are in pink. 1800 x 100 / 11340 = 15.87%; It is observed that for a normal expected activity, indirect charges are quite low. They represent 15.87% of the total charges. 3048.5 x 100 / 15925 = 19.14%; During the actual activity, it is observed that the actual indirect charges are higher than the expected indirect charges, and this is approximately an additional 4%. [...]