Variance Analysis for a Consumer Electronics Firm

Case Description

A mid-sized consumer electronics company selling premium, mid-tier, and entry-level devices across Southeast Asia is reviewing its August results. Revenue came in close to budget, but profitability fell short.

Management asks: “Our revenue looks about the same as budget, but profitability is lower. What’s going on?”

FP&A Analysis

The table below shows the budgeted figures for August 2025 compared to the reported actuals.

Variance Commentary & Insights

• Product A: Fell 150-units short of budget, resulting in revenue to be SGD19.5k below target. Gross profit was lower by SGD17.5k, mainly due to the shipment delay and a less favourable margin mix.

• Product B: Outperformed with SGD30k higher revenue than budget, supported by stronger B2B demand. Gross profit was up SGD15k, through higher fulfilment costs partly offset by the upside.

• Product C: Delivered SGD12k less revenue than planned as weaker retail demand required discounting. Gross profit declined by SGD10k, pulling margins down further.

• Overall: Total revenue came in almost on budget (SGD-1.5k), but gross profit was SGD12.5k lower. Gross margin slipped from 45% budgeted to 43% actual, mainly due to product mix and additional costs.

D. Management Implications:

• Revenue headline looks stable, but profitability was affected by mix shift (more B, less A) and margin pressure on C.

• Product B carried the overall results this month, though reliance on bulk B2B demand may not be sustainable.

• Delays in Product A and discounting in Product C highlight potential areas for review in supply planning and pricing discipline.

Disclaimer

The figures, case study, and analysis presented in this document are purely illustrative and created for example purposes only. They do not represent the actual financial results, operations, or confidential information of any specific company. Any resemblance to real businesses is purely coincidental. This material is intended solely as a demonstration of financial planning and analysis concepts.