Analysis of the Factors Generating the Variance Between the Budgeted and Actual Operating Results of the Naval Aviation Depot at North Island, California; MBA professional rept

摘要

For six of the past eight years, naval aviation depot-level maintenances activities have encountered operating losses that were not anticipated in the Navy Working Capital Fund (NWCF) budgets. These unanticipated losses resulted in increases or surcharges to the stabilized rates as an offset. This project conducts a variance analysis to uncover possible causes of the unanticipated losses. The variance analysis between budgeted (projected) and actual financial results was performed on financial data collected on the E-2C aircraft program from Fleet Readiness Center Southwest (FRCSW) located in San Diego, California. The results of the variance analysis are interpreted and discussed in terms of labor sales quantity, mix, and rate variances, material sales variance, material expense variance, labor, production overhead, and general and administrative rate/spending and quantity variances. The results of this project reveal the factors that created the greatest variance in FRCSW's net operating results. The variance analysis suggests that the factors having the greatest affect on the operating results were the material sales variances, material expense variances, and the variances due to the quantity of work. Additionally, the analysis revealed that during the year analyzed (FY 2007) FRCSW was not reimbursed for 21 percent of its material costs.