France

Year
Temprature Sales Volume Volume Growth
1996
29.2
1,435
6.7%
1997
28.4
1,484
3.4%
1998
30.9
1,714
15.5%
1999
32.9
2,031
18.5%
2000
27.3
1,984
-2.3%
2001
30.0
2,208
11.3%
2002
30.5
2,489
12.7%
2003
30.8
2,761
10.9%
2004
30.0
2,998
8.6%
2005
29.7
3,216
7.3%
2006
30.3
3,445
7.1%
2007
29.6
3,797
10.2%
2008
29.4
4,087
7.6%

Spain
Year
Temprature Sales Volume
1996
31.2
1,272
1997
29.0
1,402
1998
31.6
1,685
1999
29.8
1,852
2000
28.3
2,006
2001
28.0
1,964
2002
27.5
2,033
2003
29.9
2,231
2004
30.4
2,481
2005
31.8
2,684
2006
32.4
3,036
2007
30.4
3,346
2008
31.0
3,722

Average

Average

30.2

6.4%

Spain
2009

28.5

3,943

8.1%

2009

28.5

3,942

7.2%

2009

28.5

3,904

29.8

Predictive model (Ind regression)

France
2009
29.2
4,347
Predictive model (All regression)
2009
29.2
4,420
Predictive model (Rule of Thumb)
2009
29.2
4,381

France
SUMMARY OUTPUT
Regression Statistics
Multiple R0.9377902
R Square 0.8794505
Adjusted R0.8684914
Square
Standard Error
0.0190018
Observations
13
ANOVA
df
Regression
Residual
Total

SS
1 0.028975323
11 0.003971754
12 0.032947077

Coefficients Standard Error

Intercept -1.0152617 0.123535692
Temprature
0.0369496 0.004124684

MS
F Significance F
0.028975323 80.24882 2E-06
0.000361069

t Stat
P-value Lower 95%Upper 95% Lower 95.0%
-8.218367277 5.05E-06 -1.287 -0.7433615 -1.287161914
8.958170522 2.19E-06 0.0279
0.046028 0.027871252

Spain
SUMMARY OUTPUT
Regression Statistics
Multiple R0.7217874
R Square 0.520977
Adjusted R0.4774294
Square
Standard Error
0.0412295
Observations
13
ANOVA
df
Regression
Residual
Total

SS
1 0.020336296
11 0.018698627
12 0.039034923

Coefficients Standard Error

Intercept -0.7036655 0.233233759
Temprature
0.0267689 0.007739311

MS
F Significance F
0.020336296 11.96341 0.0053
0.001699875

t Stat
P-value Lower 95%Upper 95% Lower 95.0%
-3.016996787 0.011718 -1.217 -0.1903215 -1.217009543
3.458815665 0.005344 0.0097
0.043803 0.009734742

Italy
SUMMARY OUTPUT
Regression Statistics
Multiple R0.9438756
R Square 0.8909011
Adjusted R0.8753155
Square
Standard Error
0.0229615
Observations
9
ANOVA
df
Regression
Residual
Total

SS
1
0.0301376
7 0.003690623
8 0.033828222

Coefficients Standard Error

Intercept -1.3093428 0.189148821
Temprature
0.0486204 0.006430794
All
SUMMARY OUTPUT
Regression Statistics
Multiple R0.7758437

MS
F Significance F
0.0301376 57.16195 0.0001
0.000527232

t Stat
P-value Lower 95%Upper 95% Lower 95.0%
-6.922288837 0.000227 -1.757 -0.8620769 -1.756608665
7.56055253 0.000131 0.0334 0.0638268 0.033413947

R Square 0.6019334
Adjusted R0.5898708
Square
Standard Error
0.0364821
Observations
35
ANOVA
df
Regression
Residual
Total

SS
1 0.066415031
33 0.043921141
34 0.110336171

Coefficients Standard Error

Intercept -0.850896 0.135067053
Temprature
0.0319289 0.004519925

MS
F Significance F
0.066415031 49.90071 4E-08
0.001330944

t Stat
P-value Lower 95%Upper 95% Lower 95.0%
-6.299804367
4E-07 -1.126
-0.5761 -1.125691992
7.064043302 4.38E-08 0.0227 0.0411248 0.022733088

Volume Growth
18.9%
10.2%
20.2%
9.9%
8.3%
-2.1%
3.5%
9.8%
11.2%
8.2%
13.1%
10.2%
11.3%

Italy
Year
Temprature Sales Volume Volume Growth
2000
30.4
1,036
16.1%
2001
28.6
1,143
10.3%
2002
31.8
1,434
25.6%
2003
28.1
1,508
5.1%
2004
28.2
1,639
8.7%
2005
29.0
1,771
8.0%
2006
28.3
1,872
5.7%
2007
30.1
2,090
11.7%
2008
30.0
2,433
16.4%

Average

29.7

5.9%

Italy
2009

29.8

2,773

14.0%

5.9%

2009

29.8

2,678

10.1%

4.9%

2009

29.8

2,732

12.3%

Upper 95.0%
-0.743361464
0.046027987

All
Temprature
29.2
28.4
30.9
32.9
27.3
30.0
30.5
30.8
30.0
29.7
30.3
29.6
29.4
31.2
29.0
31.6
29.8
28.3
28.0
27.5
29.9
30.4
31.8
32.4
30.4
31.0
30.4
28.6
31.8
28.1
28.2
29.0
28.3
30.1
30.0

Upper 95.0%
-0.190321459
0.043802961

Upper 95.0%
-0.862076885
0.063826772

Upper 95.0%
-0.576100023
0.041124799

Volume Growth
6.7%
3.4%
15.5%
18.5%
-2.3%
11.3%
12.7%
10.9%
8.6%
7.3%
7.1%
10.2%
7.6%
18.9%
10.2%
20.2%
9.9%
8.3%
-2.1%
3.5%
9.8%
11.2%
8.2%
13.1%
10.2%
11.3%
16.1%
10.3%
25.6%
5.1%
8.7%
8.0%
5.7%
11.7%
16.4%

Profit Plan
Volume Euros
Sales Data
Sales ice-cream
Sales specialties
Revenue from distribution
Total Sales

4,010 17,879
445

3,661

Standard
Volume Price
4,010

4.46

445

8.23

4,455 21,540

Actual
Volume Euros
4,618 20,005
405

3,377

Variance

2,126
(284)

79
5,023 23,461

79
1,921

Cost of Goods Sold

Cost ice-cream
Dairy ingredients

2,887

7,893

0.72

2.73

3,317

9,142

1,249

Other ingredients

1,844

2,841

0.46

1.54

2,047

3,186

345

Labor

38.29

371

0.01

9.69

43.56

438

67

410
316
40.03

1,121
693
388
8,233

0.92
0.71
0.09

2.73
2.19
9.69

368
298
36.02

1,015
655
362
8,663

(106)
(38)
(26)
430

Cost Specialties
Dairy ingredients
Other ingredients
Labor
Contribution margin
Other Costs
Supervision, energy, maintenance,
Depreciation
Operating Margin

2,206
467
5,560

0.55
0.12

2,324
467
5,872

118
0
312

861
507

0.21
0.13

908
510

47
3

Selling expenses

1,078

0.27

1,139

61

Advertising

1,141

0.28

1,070

(71)

788

0.20

810

22

158
1,027

0.04

193
1,242

35
215

Selling and Administrative Expenses

Delivery expenses
Depreciation of trucks

Administrative salaries and expenses

Allocated central office expenses
Profits before Interest and Taxes

Actual (revised)
Volume Euros Price
F
U

4,015 17,879
405

4.45

Total

Volume

22.29 F

3,377

8.34 (284) U

F
F

79
4,420 21,335

79 F
(205) U

2,884

1,780

37.89

F
F
F
F

368
298
36.02

7,948

2,770

2.76

Price

45 U

-329.08 U

-22.29 U Sold almost planned, cut the price a bit

45.08 F Raised price but sold 10% less than planned
Manager's new plan for revenue

-16.97 F

1.56

(74) F

-101.63 F

381 10.06

10 U

-4.33 F

1,015
2.76
(5)
655
2.20
24
362 10.05
9
8,204
(214)

Variance
Explain

F
U
U
U

-14.07 F
22.82 U
-3.99 F

U
U
F

2,324
467
5,413

118 U
0 U
(332) U

(19.25) F
(4.08) F

U
U

908
510

47 U
3 U

(7.51) F
(4.43) F

1,139

61 U

(9.41) F

1,070

(71) F

(9.96) F

810

22 U

(6.88) F

U
F

193
783

35 U
(429) U

(1.38) F

The sales volume decreased from original,

62.27 U which was favorable; however the price of
ingridients went up
Material usage was much higher than
28.09 U planned. Also, the price of ingridients went
up slightly
Larbor hour was almost same as planned,
14.03 U
but Labor rate went up

8.96 U
1.42 U Similar tendency with the cost of ice creams
13.01 U

For machine supervision

Manager's new plan for revenue

Maybe used for the efforts to sell in west
coast of France
?
Maybe used for the efforts to sell in west
coast of France
?

SHIFT?

YES

Q1. Each row of Exhibit 2 decomposes the variance of the profits

before interest and taxes of Compagnie du Froid's French region,
which sums up to 215 thousand euro, favorable. Quantitatively,
how should Jacques Trumen, the CEO of Froid, further analyze
the variance (i.e., Perform the variance analysis on behalf of
Jacques)?

Q2. Upon the variance analysis, what action(s) should Jean

Pinoux, the French region manager, take to improve its business?