Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Wilkerson Company Variance Analysis - Case Study Example

Comments (0) Cite this document
This paper is about the reasons that caused the profits of Wilkerson Company to fall. In this paper I have used all the financial information that was given in the case and reached a conclusion. The conclusion was based on the comparisons of the data and my knowledge of the subject…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.6% of users find it useful
Wilkerson Company Variance Analysis
Read TextPreview

Extract of sample "Wilkerson Company Variance Analysis"

Download file to see previous pages However, one cannot give the real reasons behind this loss without first analyzing the data and comparing it with the standard target set by the company.
If we look at the data we might see that the variance between the actual and targeted price may have caused the profit to decline. We can see that the company was able sell valves at a price which was $.15 below the budgeted price. Since the total production of valves was 7500 units, the company incurred a negative variance of $1125. Similarly, if we look at the data of pumps, we can, again, see that there has been a massive variance among targeted and actual price. This variance amounts to $20.69 for each unit the company sells. Therefore, total variance based on the production of 12500 is $258625.This is a negative variance and it has resulted in the budgeted profit to go down. However, there is good news for the company in their third product flow-controllers, as the price of this product is rising. Therefore, the variance in this case is positive which is a good sign for the company. The variance in this case is $9.62. The total effect of this variance is $38480. From the above information, it can be said that the company should focus more on producing flow controllers than other products because of rising prices in this commodity which will ultimately lead to higher profits for the company.
Now, let's look at the machine hour variance. ...
This means that highest degree of efficiency is being maintained in machine processes. Similarly, same degree of efficiency is being maintained in the production of pumps and flow-controllers. This shows that there is been absolutely no variance among the actual and budgeted financial indicators, and the company is doing well here. Wilkerson management is also using the direct material very efficiently and there's no direct material usage variance.
Now, let's look at the gross profit margin of products that are produced by Wilkerson Company. In case of valves, we can see that there's a little change in this ratio. The budgeted margin was 35% whereas Wilkerson Company's actual margin is 34.9%. This small decrease in profit margin is a result of declining prices. The company is selling its products at 15 cents less than the budgeted price due to competition in the market. According to Randall (1996) there are various factors which might cause the company's gross profit margin to decline. These factors include: failure to control the cost of manufacturing, bad supervision of employees and wastage of resources etc. Looking at the gross-profit margin pumps, the budgeted gross profit margin was 35%, whereas Wilkerson's actual gross-profit margin is around 19% only. This massive decline again has been caused, again, by the price decline that has taken place in the industry due to stiff competition. As a result, firm has experienced massive reduction in gross profit margin. However, if we look at the data of flow-controllers, there has been an increase in the profit margin to 41% from the budgeted margin of 35%. This again is a result of ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Wilkerson Company Variance Analysis Case Study Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from
(Wilkerson Company Variance Analysis Case Study Example | Topics and Well Written Essays - 1250 Words)
“Wilkerson Company Variance Analysis Case Study Example | Topics and Well Written Essays - 1250 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Wilkerson Company Variance Analysis

Analysis of Variance Results

...Analysis of Variance Results Table 4. Analysis of Variance for ADD-like Behavior among Participants in the Remedial, General and College Preparatory English Levels.   SS df MS F d Sig. Between Groups 3476.35 2 1738.17 18.5 .72 < .001 Within Groups 20012.14 213 93.95 Total 23488.48 215 The research wanted to answer the question: “Is there a difference in the ADD-like symptoms among participants in the remedial, general, and college preparatory English levels?” In order to answer this question, the following research hypotheses were constructed: H0: µremedial = µgeneral = µcollegeprep H1: The means are not all equal. When considering the results for an Analysis of Variance, certain assumptions...
2 Pages(500 words)Research Paper

Relevance of Standard Costing & Variance Analysis

...?Relevance of Standard Costing & Variance Analysis Contents Contents 2 Introduction 3 Critical Analysis of Standard Costing & Variance Analysis 3 Conclusion 6 References 7 Bibliography 7 Introduction This project involves a critical analysis of the standard costing system and variance analysis in modern management. Due to shift in cost structures and factory automation the process of standard costing has been criticised due its declined relevance and contradiction with the modern manufacturing philosophy of JIT and continuous improvement. Critical Analysis of Standard Costing & Variance Analysis According to CIMA, standard costing is a technique to control costs by comparing the actual costs to the pre-set standards to obtain variances...
4 Pages(1000 words)Essay

Mean-Variance Analysis

...? Finance and Accounting Mean-Variance Analysis and Portfolio Theory Executive Summary A collection of assets is constitutes a portfolio, which bearselements of risk and return. Therefore, controlling risk in investments is an important undertaking for portfolio managers. A method such as mean-variance analysis helps predict and reduce the amount of risk in an investment. Holding a mix of assets, otherwise known as portfolio diversification, is a key concept upon which successful investments in the business world gain greater practicability and predictability. The practical applications of portfolio theory abound in different segments of business and finance. This report seeks to explain the principles of diversification, and discuss some...
6 Pages(1500 words)Essay

One-way analysis of variance

...? One-Way Analysis of Variance and One-way analysis of variance Introduction There are numerous forms of variance analysis including one-way Analysis of Variance (ANOVA), and two-way ANOVA among many others. One –way ANOVA is one of the many ways of analyzing data relationships. This method helps in analysing the difference between two or more sample means by sub-dividing the total sum of all squares. According to Montgomery (1997), this method helps in testing the significance of differences between classes by determining their variances. Basically, the basis of one-way ANOVA is to partition the sum of squares within and between classes. This method enables effective comparison of different classes simultaneously assuming the data...
4 Pages(1000 words)Assignment

Analysis of Variance

... Introduction to Biostatistics November 14, Statistics Homework 6 Analysis of Variance a) The null hypothesis is , H0: The mean tensile strength is equal at different levels of weight percent of cotton. (b) The assumptions of the ANOVA method include; Normality of the populations from which the samples has been drawn Equality of variance for all the samples i.e. Homoscedasticity (c) Boxplots of the observations #Let the cotton weights assume the alphabets as follows, 15=A, 20=B, 25=C, 30=D and 35=E > Strength<-c(7,7,15,11,9,12,17,12,18,18,14,18,18,19,19,19,25,22,19,23,7,10,11,15,11) > Weights<-factor(c(rep("A",5),rep("B",5),rep("C",5),rep("D",5),rep("E",5))) > Strength [1] 7 7 15 11 9 12 17 12 18 18 14 18 18 19 19 19 25 22 19 23 7 10...
1 Pages(250 words)Assignment

Variance analysis

... Micro Strategy Variance Analysis Results According to the variance analysis, the company recorded excellent performance in the three years. For instance, in 2006, the total profits of the company escalated by $182,804. This is more than anticipated. Moreover, in 2007 the total profits increased by $ 1,514,654, whereas in 2008 the total profits increased by $324,737 (table1). Also, the company’s total revenue during the three years increased as well. In this regards, there was a rise of $1,454,342 in the company’s total revenue in 2006. In 2007, there was commendable increase by $1,614,246 whereas in 2008, the total revenues increased by $1,849,417. The overall costumers’ performance in 2008 was better. In fact, it was also exceeded...
2 Pages(500 words)Essay

What Is Variance Analysis

But it is of prime importance that management; especially the supervisors acquire full explanations of the reasons for these variances otherwise such variance analysis would be no good for control purposes. Variances are of two types, favourable and unfavourable. The favourable variance means that the budgeted and the actual costs and revenues are the same as forecasted by the budgeting department of the company, whereas unfavourable means the opposite of it.
In any manufacturing concern, the variable cost comprises of direct material, direct labour and variable production overhead cost. The responsibility of material price variance lies with the purchasing department. If the material price variance is unfavourable, then it sho...
6 Pages(1500 words)Assignment

Variance Analysis

... July 28, Variance Analysis Introduction Variance analysis compares both actual performance and standards (Zimmerman, ). Standards serve as guides for the line and staff employees. Favorable or unfavorable outcomes occur. The important variance analysis management tool enhances performance. Price Variance Analysis As an example of materials’ price variance analysis, the Obama Company sets the standard purchase price for each raw material Ziplock piece at $ 2.50 (Zimmerman, 2014). Consequently, the purchasing department strives to find a supplier having a raw material price of $2.50 or even lower. If the Obama Company purchases from Bush Company offering Ziplock at $ 2.65 per piece, an unfavorable variance arises. An unfavorable variance...
2 Pages(500 words)Admission/Application Essay

Variance Analysis Case Study

...Finance and accounting Hospital’s original profit forecast = original revenue forecast – original expense forecast. Actual IP revenue (FY 11YTD) is $24220949 Actual IP expense (FY 11YTD) is 25256062 Profit = actual IP revenue – actual expense Profit is (24220949 – 25256062) -$1035113 Half way through the fiscal year revised projection for FY 11 profit is calculated as follows: The total inpatient product line Projected IP revenue for FY11 is $50155710 The total expense FY11 Budget (FY 10+6% inflation) = 48069860 The original profit forecasted is $(50155710 – 48069860) = $2085850 2. Inpatient service lines that were over budgeted were: CIRC (diseases and disorders of the circulatory system) over stated by $1305487, DIGEST... and accounting...
2 Pages(500 words)Speech or Presentation

The Need for Variance Analysis

...The Need for Variance Analysis The need for variance analysis Introduction Adhering to the budget is imperative in any organizationin order to prevent overspending. In many cases, budget implementers find themselves spending more than the projected amounts in the initial budget. To determine the possible causes of overspending, variance analysis is inevitable (Baker and Baker, 2014). This paper describes the value of variance analysis in decision making and the next steps that i would need to take after variance analysis using a given case study. Value of variance analysis in decision making Before delineating the value of variance analysis in decision making, it is important to define variation and variance analysis. Baker and Baker...
2 Pages(500 words)Term Paper

The Company Targets Customers

As a principle, HP doesn’t reveal non-public product details, financial information, marketing, R &D, manufacturing, and Personnel Data. We will work on whatever information the company discloses and is available in the common domain of knowledge to assess our strengths, marketing mix, current strategies, current events, and global information and discuss how they can be more streamlined in. In today’s world, no amount of market strategizing is enough, no amount of competitor’s latest strategies and innovation and we have always to remain in an ever-evolving role.
We have chosen our Personal Computer as the product of our current study. Just for sake of recall, we make mention of current product segmenta...
8 Pages(2000 words)Case Study

Internal and External Environmental Analysis for the Bakery Business

Liberalization of foreign investment and technology policy of the government is supportive of establishing industrial units in the country.

Threat: The UK food regulatory authority is planning to enforce the EC Regulations relating to food labeling. The labeling requirements under the new regulations will affect the food industry as the suppliers will be legally obliged to disclose the GM content of foods to the caterers. Thus business firms in the bakery industry also will be effected through the exclusion of flexible manner of labeling arrangements in the case of flour confectionery involving GM Soya or maize. (Genetically modified and novel foods (labeling) (England) regulations, 2000).

Trend: The new subs...
6 Pages(1500 words)Case Study

The Necessity of Job Analysis

... standardized information and data. Disadvantages of Questionnaires It is usually difficult to develop the most appropriate questionnaires. Since the employees fill and submit them at their own time, the response may be low, with some failing to submit them. There may also be problems due to failure of completion of the questionnaires. In some cases, the response may require interpretation and the respondent may not be available (James Edwards 2006 pp.16-26). Case Studies of Job Analysis Air Canada is one of the companies which benefited from the job analysis that was conducted when the company planned to employ 1000 more flight attendants. It was able to identify the key requirements to search for in the more than 20,000 candidates who...
7 Pages(1750 words)Coursework

Analysis of the Methods of 3 Research Papers about Child Abuse

Research ethics was maintained as the identity of the individuals participating was kept secret. As far as the validity of the study was concerned, the researchers attempted to use content validity in order to get an accurate response. The content validity focused on measuring off the ethnicities and gender percentages within the area and attempting to get a random sample of individuals via the phone. Their approach to random calling allowed for a significant random sample in the study. There were a few issues, however, with this type of approach. Those answering the phone sometimes were not always the desired individual, and not all of the desired people were surveyed. Different replacements did have to be used, and the attempt w...
6 Pages(1500 words)Literature review

Comparative Family Analysis

The second component of this essay will be a comparative analysis with the American family to the Arab family, generally speaking, but also clearly described by Homa Hoodfar, in her book Between Marriage and the Market. This essay will discuss the impact of globalization on different types of families in different societies and cultures. The terms ‘traditional’, ‘modern’ and ‘postmodern’ will be defined, elaborated upon and discussed on a continuum of change. Social change, in the face of globalization, will be discussed in relation to how cultures and families have grown or resisted the forces of globalization. We now turn to an exploration of the types of families in the world and follow...
6 Pages(1500 words)Coursework

Economic Analysis of India

The country’s economy is fast growing with a stable political system that encourages foreign investment although with certain restrictions. The country generally has good energy, transport and communication systems which make the cost of doing business affordably.

The Republic of India found South of Asia is by far the world’s most populous democracy and ranks seventh largest in terms of geographical area (Brown, 1994). India is also the second most highly populated country in the world. The country has a rich culture with four major religions having originally emerged from it; Sikhism, Buddhism, Hinduism, and Jainism. The Indian Republic consists of seven union territories and 28 states and ranks twelfth la...
8 Pages(2000 words)Case Study

Airbus A 380: SWOT and Porters Five Forces Analysis

... A 380 and its nearest competitor, Boeing 747-8. The Airbus-Boeing rivalry can be compared to the Coke Pepsi rivalry and in both cases, the stakes are high and each of the rivals tries to undercut its competitor using all means at their disposal. This includes involving the governments of the US and the EU to aid their respective causes by means of subsidies and lobbying. The lobbying of the countries of the developing world by Airbus and Boeing often takes the form of inducements and quid pro pro’s contingent on the willingness of the countries to buy aircraft from these companies. The price of Airbus A 380 is in the range of 200- 220 Million USD whereas that of Boeing is in the range of 180-200 Million USD. CUSTOMERS One of the first...
6 Pages(1500 words)Case Study

Business Sustainability and Society: Coca-Cola Company

For centuries, ethics has been a crucial and significant component of human societies that contributed enormously to the creation of norms and values through religious influences, as well as through the contribution of intellectuals and philosophers in society. Unfortunately, nowadays, it is an observation that individuals, organizations, and even nations have commenced overlooking the phenomenon of ethics in their practices, specifically in the business sector that has become the major stakeholder confronting criticisms related to ethical practices. Critics (Crane, pp. 23-29, 2007) argue that business ethics has now become a component limited to theoretical policies and frameworks of business organizations, and such principles an...
10 Pages(2500 words)Case Study

Analysis of Educational Website

... Analysis of Educational Website Introduction Since antiquity, education remained a major component of human societies; however, until few decades ago, it existed in the society in its traditional and conventional form that involved one-to-one interaction of teachers with their students in classrooms. Since few years, educators and scholars have witnessed rapid advancements in the field of information and technology that has altered almost every sector of the society in a rapid manner, and so the education sector as well. In such advancements, internet has now become one of the most popular platforms for students, teachers, businesspersons, and individuals from every sector to acquire education and information within few clicks and minutes...
7 Pages(1750 words)Article

Analysis of Articles about Climate Change

...Climate change Can we imagine an Earth where there are no green mountains, no deep blue seas and no living creatures? No. But a disaster of such magnitude and dimension is looming over Earth. Humans have identified this threat, defined it and given it a name, global warming. This dangerous proposition is based on the truth that even a 5 % increase in the surface temperature on Earth can wipe out life from this beautiful planet. And the temperature is increasing as never before. It was in 1990s that the world began to hear serious warnings on global warming and climate change. The summary for policy makers prepared as part of the first assessment report by Inter-governmental Panel on Climate Change was the first ever in depth... change Can we ...
6 Pages(1500 words)Literature review
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic Wilkerson Company Variance Analysis for FREE!

Contact Us