I

Olam Cam Sarl

Overhead Variance Analysis Up to The month October

1. Product. - Coffee Arabica

Department: BCC
Total budget : 16.452.842 Fcfa
Budgeted 2 504 120 Fcfa Total actual : 16.452.842 Fcfa
Actual 3 130 152 Fcfa Total Variance (6.519.900) Fcfa
(626,032) Variance

The following are reasons for the adverse variance:

1. End of campaign Bafoussam BC house repair expenses of 400,700Fcfa for Jul-06
2. Purchase of two new tyres for BC’s (Mr. Nitish) vehicle in July-06 for
250,000Fcfa
3. Jerry expenses of 249 500 to be moved to PRO. As such variance will reduce
to 376 532 adverse that will be explain by 1 & 2 above.
Department: PRO
Budgeted 1,225,332 Fcfa
Actual 4,871,115 Fcfa
(3,645,783) Fcfa Variance

1. The most alarming variation in this Dept and Product come from
classification of others (rates and taxes mis. Expense) i.e exps for the
distribution of fertilizers for the Eco café project of 3,224,250 Fcfa. Actually
this will be move to Mis Dc in the next month.
2. Communication expenses exceed by 203,000 Fcfa
3. The end of campaign G/H repair expenses have also led to excess house related
cost worth 140,000 Fcfa.

2. Product. – Cocoa
Department: BCC
Total budget : 146.126.256 Fcfa
Budgeted 14,862,194 Fcfa Total actual : 142.942.223 Fcfa
Actual 11,538,807 Fcfa Total variance: (3.184.033) Fcfa
3,326,387 Variance

Reasons for variations: Despite the positive balance or variation in this Dept for Cocoa,
T $ C, Communication, and depreciation expenses remain points of focus;

1. As concerns T $ C, addition staff (driver for the BCC) expenses have increased
the expense, as was budgeted just for one BC assistance in Kumba by 235,200
Fcfa
2. The payment of pending Kumba BC office line bills worth 1,512,584 Fcfa this
October has led to this variation in communication expenses of 1,209,099 Fcfa
3. The negative variation in depreciation of 285,973 Fcfa is because depreciation
was not budgeted for.
 II
Department: PCH - Cocoa

Budgeted 15,155,848 Fcfa

Actual 7,962,706 Fcfa
7,193,142 Fcfa Variance

The large positive variance in this Department code does not withstand the fact there
is and adverse variance in the following classification head.
1. The variance in salary and benefits result in the payment of fees in the American
School of 2,975,550 Fcfa.
2. T & C - purchase an air ticket worth 737,770 Fcfa in September-06.

Department: PCH - Coffee

Budgeted 2,577,879 Fcfa

Actual 3,536,376 Fcfa
(958,497) Fcfa Variance

1. Adverse variance due to purchase of air ticket for Mr. Anirban of 646.800 in
August’06 Fcfa.
2. Accrued tell bill for Camtel and Orange for the month of June 06 booked in
current year 0607 for 452,529 Fcfa.

Department: PRD - Cocoa

Budgeted 28,757,285 Fcfa

Actual 34,148,209 Fcfa
(5,390,924) Fcfa Variance

Reasons for variances

1. Depreciation of vehicle related for 1,611,423 Fcfa and purchase of spare parts
for the new Olam truck at the Usine

2. Runner expenses for wages and other related booked here as and about

1,955, 999 Fcfa as allocation to PRD for Oct’06. NB: this expense is however
booked under ‘00’ for Usine.
3. In warehouse related there has been in payment to CAPI for purchase of Usine
spare parts for 3.490.400 Fcfa.

Department: PRO
Budgeted 46,254,791 Fcfa
Actual 37,669,733 Fcfa
8 ,585, 058 Fcfa Variance
 III
Though this Dept presents a considerable budget surplus, individual expense heads
do not.

1. Expenses for rent and othere related expensed for the Bcc for both Yaounde (1
477 700 for Rents and repairs works) and for Kumba (337 400 Fcfa) Installation
of Toilet and Purchases of DVD to be rectify to BCC for both Units respectively.

2. 139,250 booked in PRO instead of BCC for Internet installation.

3. Truck related exps for Insurance and R&M for 405,939 not budgeted for.

3.Product. – Coffee Robusta

Department: BCC
Total budget : 84.984.138 Fcfa
Budgeted 12,811 Fcfa Total actual : 89.996.858 Fcfa
Actual 2,607,447 Fcfa Total variance:( 5.012.720) Fcfa
(2,583,636) Fcfa Variance

Main reasons for the variance in this DEPT for this product.

1. PCH exps for 728 539, be moved to CR for PCH houses related Actually this was
prepaid rents booked at the time his exps were booked under BCC.
2. Depreciation vehicle for 673 973 Fcfa.

Department: PRO

Budgeted 5,950,920 Fcfa

Actual 8,901,605 Fcfa
(2,950,685) Fcfa Variance

Generally, the expenses for this department exceed budget and the differences per
expenses heads result from the following reasons.

1. For what concerns house related costs, it should be noted that there exist many
G/H houses for which rents, electricity and water bills are paid and R $ M done.
2. As for T $ C, it exceeds because runners salaries have been include.
3. As concerns communication expenses, it should be noted that, the budgeted
amount is too low (125,000Fcfa) considering the number of Units and Unit
Heads.
 IV

4.Product. – Rice

Department: BCC
Total budget : 149.603.102 Fcfa
Budgeted 30,749,209 Fcfa Total actual :169.196.073 Fcfa
Actual 26,713,276 Fcfa Total variance:(17.592.971) Fcfa
4,035,933 Fcfa Variance

Despite the total positive balance, some account heads still present negative balances
for which explanations are required.

1. The budget for T $ C BCC is exceeded because of the purchase of 4 air tickets
during the past four months, worth 2,724,040 Fcfa.
2. It is being noted that warehouse related cost is noted budgeted for and this Dept
code does not deserve warehouse expenses.
3. As for class others, the entertainment of 750,000 Fcfa for Hamidou Saidou’s truck
is very likely responsible for this excess.
4. Depreciation exceeds by 268,308 Fcfa, because not budgeted for.

Department: SLD

Budgeted 74,002,306 fcfa

Actual 84,876,076 Fcfa
(10,873,770) Fcfa Variance

This alarming discrepancy between the budget and the actual expenses in SLD is due
to the following.

1. The great variance in vehicle related cost results from 2,500,000 for R $ M and
3,231,698 Fcfa for depreciation. Above all, this expense head is not budgeted for.
2. As for T $ C, the expenses for Annual meeting in Limbe for 718,500 Fcfa, the
North Zonal Head’s visit to Nigeria 207,500 Fcfa and runners expenses for 375,800
Fcfa are largely responsible for the excess.
3. The payment of June-Sept security expenses to Wackhenhut of 10,050,000 Fcfa all
in account period four is responsible for the variation of (9,349,024 Fcfa) in this
expense head.
4. As concerns classification others, the facile to Del Gnral in Yde of 5,000,000 Fcfa,
Audit fee to Bell Bell of 1,000,000 Fcfa and Legal fee to Henri job have generated
the variance in this expense head.
5. Depreciation presents a negative variation because not budgeted for.
 V
5.Product. – Milk Powder

Department: BCC
Total budget :19.071.380 Fcfa
Budgeted 6,809,917 Fcfa Total actual : 25.476.285 Fcfa
Actual 7,481,806 Fcfa Total variance: (6.404.905) Fcfa
(671,889) Fcfa Variance

The reasons for this negative variance are thus:

1. Salaries and benefits have exceeded because the payment of 1,000,301 Fcfa as
leave allowance for 3 years to Mr. Fon.
2. As for Mr. Fon’s car, the R $ M expenses of 900,000 fcfa are led to the
tremendous increases in this expense head.

5.Product. – “00”

Department: CHC
Total budget : 413.053.685 Fcfa
Budgeted 18,557,141fcfa Total actual : 451.768.214 Fcfa
Actual 31,386,167 Fcfa Total variance: (38.714.528) Fcfa
(12,829,167) Fcfa Variance

Diverse reasons explain the large negative variance in this dept code.

1. The difference in salaries and benefits is due to the payment of GM’s child’s fees in
the American school worth 2,556,954 Fcfa.
2. For house related, the R$M of GM’s house for 500,000 Fcfa and alarm charges for
200,000 Fcfa have led to a negative variance.
3. The passing of depreciation charges in vehicle related cost of 6,817,873 Fcfa is
responsible for the variance in this expense head.
4. As for others, it should be noted that, despite the numerous entertainment of which
one granted by the GM is up to 460,000 Fcfa, the budget allocated for this is too low
(691,625 Fcfa only).

Department: CHO

Budgeted 3,108,667 Fcfa

Actual 919,616 Fcfa
2,189051 Fcfa Variance

Despite this global positive balance, salaries and staff benefits remains negative because
Mr. Labah’s salary now passes under this expense head which was not formerly so.
 VI
Department: FAM

Budgeted 4,279,984 Fcfa

Actual 9,133,454 Fcfa
(4,853,470) Fcfa Variance

The following reasons can be advance for the negative variances.

1. The variance in salaries and benefits result from Mr. Meetei’s work and resident
permits for 1,270,000 fcfa and entertainment to staffs for 407,800 Fcfa.
2. Despite the payment of alarm expenses and prepaid rents, it is worth noting that
house related costs are high, as it is the case for electricity bills.
3. Concerning the vehicle related cost, it should be noted that deprecation of 859,134
Fcfa and spare parts expenses of 249,000 Fcfa are inclusive.

Department: HOC

Budgeted 64,039,643 Fca

Actual 88,739,539 Fcfa
(24,699,896) Fcfa Variance

The following reasons start to explain this large negative variance in this Dept.
1. The variance in salaries and benefits results from the annual meeting expenses of
2,875,150 Fcfa and out of pocket audit fee to E$Y of 2,244,400 fcfa.
2. The house related cost variance is due to the booking of Mr. Bikash’s spectrum bill
in HOC.
3. As for communication expenses 3,466,666 fcfa for PAD1 rentals, have been
passed here.
4. As for deprecation with a negative balance of (3,651,703 fcfa)
5.

Department: FAO
Budgeted 18,296,668 Fcfa
Actual 15,080,499 Fcfa
3,216,169 Fcfa Variance
All seems quite well but for T $ C that exceeds
the limits due to some out station expenses and month end late sittings.

Department: MFA

Budgeted 14,952,493Fcfa
Actual 13,709,636Fcfa
1,242,875 Fcfa Variance

Though presenting a total positive variance, some expense heads need being looked into.
1. The variance in vehicle related results from depreciation of 2,126,242 fcfa and R $
M of vehicle of 224,000 Fcfa.
2. As for depreciation, the variance is because it was not budgeted for.
 VII

Department: SHD

Budgeted 3,979,893 Fcfa

Actual 4,315,484 Fcfa
(335,591) Fcfa Variance

This negative variance results from the following expense head excesses.
1. Salaries and benefits excess results from leave allow paid, milk purchase of
146,000 Fcfa and medical expenses of 125,000Fcfa.
2. If just one staff can incur taxi expenses up to 480,000Fcfa,then the budgeted
amount of 240,000 Fcfa is relatively small.
3. The variance in Others results from the purchase of ink cartridge and
Entertainment of phyto officers.
4. Depreciation exceeds because not budgeted for.

Department: RCC

Budgeted 9,666,667 Fcfa

Actual 9,422,150 Fcfa
244,517 Fcfa Variance

In this Dept, the T $ C exceeds because of the hotel bills for Mr. Renadev and Mr.
Venkalaman of 941,450fcfa and 480,700 fcfa respectively not budgeted for.