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
1996
31.2
1997
29.0
1998
31.6
1999
29.8
2000
28.3
2001
28.0
2002
27.5
2003
29.9
2004
30.4
2005
31.8
2006
32.4
2007
30.4
2008
31.0

Average

Average

30.2

6.4%

Spain
2009

28.5

8.1%

2009

28.5

7.2%

2009

28.5

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 0.93779022
R Square 0.87945049
Adjusted 0.86849145
Standard 0.0190018
Observat
13
ANOVA
df
Regressi
Residual
Total

SS
1 0.0289753231
11 0.0039717538
12 0.0329470769

Coefficients Standard Error

Intercept-1.01526169 0.123535692
Tempratu 0.03694962 0.0041246836
Spain

MS
F Significance F
0.0289753231 80.248819 2E-006
0.0003610685

t Stat
P-value Lower 95%Upper 95%
-8.2183672774 5.05E-006 -1.2872 -0.74336146
8.9581705215 2.19E-006 0.02787 0.04602799

SUMMARY OUTPUT
Regression Statistics
Multiple 0.72178735
R Square 0.52097698
Adjusted 0.47742943
Standard 0.04122954
Observat
13
ANOVA
df
Regressi
Residual
Total

SS
1 0.0203362963
11 0.0186986267
12 0.0390349231

Coefficients Standard Error

Intercept -0.7036655 0.2332337589
Tempratu 0.02676885 0.0077393113

MS
F Significance F
0.0203362963 11.963406 0.00534
0.0016998752

t Stat
P-value Lower 95%Upper 95%
-3.0169967873 0.0117184 -1.217 -0.19032146
3.458815665 0.0053443 0.00973 0.04380296

Italy
SUMMARY OUTPUT
Regression Statistics
Multiple 0.94387556
R Square 0.89090108
Adjusted 0.87531552
Standard 0.02296153
Observat
9
ANOVA
df
Regressi
Residual
Total

SS
1 0.0301375997
7 0.0036906225
8 0.0338282222

Coefficients Standard Error

Intercept-1.30934277 0.1891488214
Tempratu 0.04862036 0.0064307944
All
SUMMARY OUTPUT
Regression Statistics
Multiple 0.77584369
R Square 0.60193343
Adjusted 0.58987081
Standard 0.0364821

MS
F Significance F
0.0301375997 57.161955 0.00013
0.0005272318

t Stat
P-value Lower 95%Upper 95%
-6.9222888374 0.0002267 -1.7566 -0.86207688
7.5605525297 0.0001305 0.03341 0.06382677

Observat

35

ANOVA
df
Regressi
Residual
Total

SS
1 0.0664150306
33 0.0439211408
34 0.1103361714

Coefficients Standard Error

Intercept-0.85089601 0.1350670525
Tempratu 0.03192894 0.0045199247

MS
F Significance F
0.0664150306 49.900708 4E-008
0.0013309437

t Stat
P-value Lower 95%Upper 95%
-6.2998043671 4.00E-007 -1.1257 -0.57610002
7.064043302 4.38E-008 0.02273 0.0411248

Sales Volume Volume Growth

1,272
18.9%
1,402
10.2%
1,685
20.2%
1,852
9.9%
2,006
8.3%
1,964
-2.1%
2,033
3.5%
2,231
9.8%
2,481
11.2%
2,684
8.2%
3,036
13.1%
3,346
10.2%
3,722
11.3%

Italy
Year
Temprature Sales Volume
2000
30.4
1,036
2001
28.6
1,143
2002
31.8
1,434
2003
28.1
1,508
2004
28.2
1,639
2005
29.0
1,771
2006
28.3
1,872
2007
30.1
2,090
2008
30.0
2,433

Average

29.7

29.8

2,773

3,943

5.9%

Italy
2009

3,942

5.9%

2009

29.8

2,678

3,904

4.9%

2009

29.8

2,732

Lower 95.0%
-1.2871619139
0.0278712519

Upper 95.0%
-0.7433614641
0.0460279869

Lower 95.0%
-1.2170095433
0.0097347419

Upper 95.0%
-0.1903214591
0.0438029607

Lower 95.0%
-1.7566086652
0.0334139466

Upper 95.0%
-0.8620768847
0.0638267715

Lower 95.0%
-1.1256919918
0.0227330877

Upper 95.0%
-0.5761000228
0.0411247995

Volume Growth
16.1%
10.3%
25.6%
5.1%
8.7%
8.0%
5.7%
11.7%
16.4%

14.0%
10.1%
12.3%

All
Temprature Volume Growth
29.2
6.7%
28.4
3.4%
30.9
15.5%
32.9
18.5%
27.3
-2.3%
30.0
11.3%
30.5
12.7%
30.8
10.9%
30.0
8.6%
29.7
7.3%
30.3
7.1%
29.6
10.2%
29.4
7.6%
31.2
18.9%
29.0
10.2%
31.6
20.2%
29.8
9.9%
28.3
8.3%
28.0
-2.1%
27.5
3.5%
29.9
9.8%
30.4
11.2%
31.8
8.2%
32.4
13.1%
30.4
10.2%
31.0
11.3%
30.4
16.1%
28.6
10.3%
31.8
25.6%
28.1
5.1%
28.2
8.7%
29.0
8.0%
28.3
5.7%
30.1
11.7%
30.0
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
445

4.46
8.23

4,455 21,540

Cost of Goods Sold

Cost ice-cream
Dairy ingredients

2,887

7,893

0.72

2.73

Other ingredients

1,844

2,841

0.46

1.54

Labor

38.29

371

0.01

9.69

410
316
40.03

1,121
693
388
8,233

0.92
0.71
0.09

2.73
2.19
9.69

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

861
507

0.21
0.13

Selling expenses

1,078

0.27

Advertising

1,141

0.28

788

0.20

158
1,027

0.04

Selling and Administrative Expenses

Delivery expenses
Depreciation of trucks

Administrative salaries and expenses

Allocated central office expenses
Profits before Interest and Taxes

Actual
Volume Euros
4,618 20,005
405
3,377
79
5,023 23,461

Variance

2,126
(284)
79
1,921

Actual (revised)
Volume Euros
Price
F
U
F
F

4,015 17,879
405
3,377
79
4,420 21,335

Var
Total

Volume

4.45
8.34

0
(284) U
79 F
(205) U

22.29 F
-329.08 U

3,317

9,142

1,249 U

2,884

7,948

2.76

45 U

-16.97 F

2,047

3,186

345 U

1,780

2,770

1.56

(74) F

-101.63 F

43.56

438

67 U

37.89

381

10.06

10 U

-4.33 F

368
298
36.02

1,015
655
362
8,663

(106)
(38)
(26)
430

368
298
36.02

1,015
655
362
8,204

2.76
2.20
10.05

2,324
467
5,872

118 U
0 U
312 F

908
510

F
F
F
F

(5)
24
9
(214)

F
U
U
U

-14.07 F
22.82 U
-3.99 F

2,324
467
5,413

118 U
0 U
(332) U

(19.25) F
(4.08) F

47 U
3 U

908
510

47 U
3 U

(7.51) F
(4.43) F

1,139

61 U

1,139

61 U

(9.41) F

1,070

(71) F

1,070

(71) F

(9.96) F

810

22 U

810

22 U

(6.88) F

193
1,242

35 U
215 F

193
783

35 U
(429) U

(1.38) F

Price

Variance
Explain

SHIFT?

-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

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 YES
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
?

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?