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    Midwest Ice Cream Company

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    Midwest Ice Cream Company (HBS Case) 9-175-070

    Explain the major reasons for the favorable operating income variance of $71,700.

    How can an analysis of the profit variance highlight those areas needing management attention?

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    Explain the major reasons for the favorable operating income variance of $71,700.

    The first major reason for the favorable operating income variance of $71,700 is that there have been higher sales volume than that forecasted. Essentially, higher sales volume has been responsible for the favorable operating income variance. The actual net sales are $9,657,300, whereas, the budgeted sales volume was $9,645,300. On the other hand unfavorable variance due to operations have actually decreased the favorable operating income variance by $46,000. Specifically, the major reason for the favorable operating income variance is the higher actual sales than planned sales of product D and product E. The planned product sales of product D was ...

    $2.19

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