— Crestline Control Systems, Inc. / Industrial automation, Ohio (fictional)
A two-year, full-cycle financial reporting and budgeting model — built end-to-end from a blank workbook to demonstrate competency in variance analysis, master budgeting, and GAAP financial-statement preparation. Headline result: FY2024 net income beat budget by $189K (+13.9%), driven by stronger Custom Systems volume but partially offset by direct-labor wage inflation.
Key Findings
01
Revenue beat by $465K (4.0% F) — driven by Custom Systems volume (+8 units, $440K F) and Subscription growth (+39 subs, $39K F). Pricing held: P1 Standard Panels achieved a $174 unit price increase ($80K F).
02
Direct-labor rate variance is the chief cost concern — actual wage rate ran $28.80/hr vs. $26.00 standard (10.8% above plan), driving a $117K U rate variance. Recommend updating standard wage rates for the FY2025 budget cycle.
03
DL efficiency partially offset rate inflation — workers consumed 41,700 hours vs. 42,700 standard for actual output, a $26K F efficiency variance. Net DL variance: $91K U.
04
Manufacturing overhead came in $345K favorable — split between $160K of spending discipline within the OH pool and $185K of favorable volume absorption from higher activity levels.
05
EBIT margin expanded from 15.4% to 16.5% — top-line growth and OH leverage outpaced direct-cost overruns; operating income beat plan by $209K (11.6% F).
At a Glance
Subject
Crestline Control Systems, Inc. (fictional) Industrial control panels & automation
Portfolio Case Study · Budget Analysis & Reporting
Prepared by Oguz Tiras
The variance story, decomposed.
Static variance tells you how much you missed. Decomposed variance tells you why. The charts below isolate the eight largest profit-impact drivers and break the sales beat into its volume vs. price components.
Top variance drivers — profit impact ($)
Sales variances and decomposed cost variances. Green = Favorable, Red = Unfavorable.
Read: The single biggest favourable driver was the Custom Systems volume win (+$479K). The DM Price/Mix and DL Rate variances together absorbed $370K of profit; favourable manufacturing-overhead leverage of $345K nearly offset the cost overruns.
Sales variance by product — volume vs. price
Decomposing the +$465K revenue beat by product line — ■ Volume Variance■ Price Variance.
Read: P2 Custom Systems delivered the entire revenue beat through volume (+8 units) while accepting a small price concession. P1 Standard Panels held volume but raised price (+$174/unit). Maintenance contracts were exactly on plan.