Decision makers in XYZ company need to analyze the organization’s financial performance in order to determine whether departments’ expenditures are over or under budget, thus, deriving actionable decisions. Table 1 provides information extracted from the organization’s data warehouse on the budgeted expenses against actual expenses of the company’s departments over one year period of time.
Dept. Q1 Budget Q1 Actual Q2 Budget Q2 Actual Q3 Budget Q3 Actual Q4 Budget Q4 Actual
Distribution 390,000 375,000 395,000 382,000 400,000 390,000 410,000 408,000
Facilities 675,000 693,000 800,000 837,000 750,000 713,000 750,000 790,000
HR 350,000 346,000 350,000 342,000 350,000 340,000 350,000 367,000
IS 950,000 925,000 850,000 890,000 875,000 976,000 900,000 930,000
Table 1: Departments’ yearly performance
A) Use the most appropriate basic visual chart covered in class to show, for each department, the percentage variance between the budgeted and actual expences over each of the four quarters.
Variance% = ((budgeted expense – actual expense) / actual expense) * 100
(a positive value indicates that the department is spending less than the budgeted amount, whereas negative values indicate that expenses are more than anticipated).
B) Use the most appropriate basic visual chart covered in class to visualize the difference between the departments’ overall budget values against overall actual values over the four quarters.
C) As a decision maker, draw one informative conclusion from each chart (A) and (B) using your own words.
Sample Solution