Eastern Productions is a medium- sized maker of promotional films and advertisements for the beverage industry. It has six salespeople on pay roll. The following table shows the results against plan on two key variables: total sales and number of jobs sold. The company usually makes more money o of its larger clients as it can make multiple film clips o of the same basic footage shot. Small clients are usually “one-up” advertisements, so the entire cost of a shoot has to be absorbed in one advertisement, tending to make the job less profitable over all.

REQUIRED:

a. Complete a variance analysis for each salesperson in terms of dollar sales. Be sure to mark the variance as favorable or unfavorable. Who is the best performer this year? The worst performer? Why?

b. Now do a variance analysis for the number of actual vs. planned jobs sold. Given that profitability of a large job is normally greater than that of a small job, who looks like the best performer now? The worst performer? Why?

c. Divide the planned sales revenue for each salesperson by the planned number of jobs. What size job is the company targeting on average?

d. Now divide actual sales revenue for each salesperson by the actual number of jobs. Who looks like they are bringing in the more profitable jobs from this calculation? Least profitable? Why?

e. Can you easily assign favorable or unfavorable ratings to the number of jobs sold? Why or why not? In other words, how does the size and profitability of different jobs affect your answer?

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Eastern Productions Actual Dollar Sales Planned Jobs Sold Jobs Sold Planned Actual Salesperson Dollar Sales Sam Sneed $500,000 $465,000 50 75 Wendy Silversmith $450,000 $500,000 45 40 Anne Conlon $475,000 $525,000 50 60 James Burke $600,000 $585,000 60 50 Frederick Thompson $550,000 $600,000 55 45 Susan Coyle $500,000 $575,000 50 80 Company Total $3,075,000 $3,250,000 310 350