Scribd
Upload
23 views2 pages

Variance Analysis Table

The variance analysis for the Taejon Branch in 2008 shows a net income increase of $4.33M when using the Activity-Based Costing (ABC) method compared to the current revenue-based method. The analysis highlights favorable variances in allocated overhead costs, particularly in areas such as handling traffic accidents and personnel training. Overall, the ABC method resulted in a more favorable financial outcome for the branch.

Uploaded by

Hiya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
23 views2 pages

Variance Analysis Table

The variance analysis for the Taejon Branch in 2008 shows a net income increase of $4.33M when using the Activity-Based Costing (ABC) method compared to the current revenue-based method. The analysis highlights favorable variances in allocated overhead costs, particularly in areas such as handling traffic accidents and personnel training. Overall, the ABC method resulted in a more favorable financial outcome for the branch.

Uploaded by

Hiya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Variance Analysis Table: Taejon Branch Net Income (2008)

Summary Table:

Current Method (Revenue- ABC Variance (ABC -


Item
Based) Method Current)

Revenue $33.20M $33.20M $0.00M

Direct Costs $(18.60)M $(18.60)M $0.00M

Allocated HQ
$(13.03)M $(8.70)M $4.33M Favorable
Overhead

Net Income $1.57M $5.90M $4.33M Favorable

Detailed Variance by Cost Driver:

Total ABC Current Variance


Cost Pool /
Company Cost Driver Allocation Method (ABC -
Overhead
Cost 2008 Used to Taejon Allocation Current)
Activity
($M) ($M) ($M) ($M)

OS Team -
Number of 1.43
Handling Traffic 16.40 0.96 2.39
Accidents Favorable
Accidents

GA Team -
Personnel Number of 0.91
8.40 0.31 1.22
(Payroll, Eval., Employees Favorable
Training)

OS Team - Number of
0.55
Training of Sales 7.10 Sales 0.49 1.03
Favorable
People Persons
Total ABC Current Variance
Cost Pool /
Company Cost Driver Allocation Method (ABC -
Overhead
Cost 2008 Used to Taejon Allocation Current)
Activity
($M) ($M) ($M) ($M)

IT Team -
Number of 0.46
Employee 4.20 0.16 0.61
Employees Favorable
Training

IT Team -
Number of 0.37
Branch PC 4.80 0.33 0.70
PCs Favorable
Maintenance

GA Team -
Number of 0.22
Branch Building 4.80 0.48 0.70
Branches Favorable
Maintenance

OS Team -
Operating Number of 0.03
0.70 0.07 0.10
Performance Branches Favorable
Evaluation

Investment
Team (All 12.50 Revenue 1.82 1.82 0.00
Activities)

Marketing Team
12.70 Revenue 1.85 1.85 0.00
(All Activities)

IT Team - HQ &
Branch IT 15.30 Revenue 2.23 2.23 0.00
Support

TOTAL
4.33
OVERHEAD 89.40 - 8.70 13.03
Favorable
COSTS

You might also like