Table 4: Any Company, Inc.: Comparative income statement for the month of October 20__

(in $000,000)

actual planned difference

divisional profit contribution

division A $100 $120 $(20)

division B 70 65 5

division C 140 150 (10)

total profit contribution $310 $335 $(25)

head office expenses 110 105 (5)

income before taxes $200 $230 $(30)

Comments

(1) An industrywide strike in customer factories caused a slowdown in division A deliveries, reducing profit by $24 million.

(2) Continued strong demand in division B was reflected in increased volume and a stronger price structure.

(3) Division C's unfavourable results were caused by production losses due to the model change and heavy introductory costs for the new line. These losses should be recovered by the end of the year.

(4) Salary increases account for most of the variance in head office expenses. A cost-management study will seek ways to offset this.