Compare forecast with actual results
See this course’s project requirements
A fictional twelve-month accrual income forecast with demand/capacity drivers, cost behavior, seasonality, sensitivity and revision log.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- A feasible-unit and earned-revenue driver ledger.
- A twelve-month seasonal sales and capacity reconciliation.
- A cost-behavior and monthly profit bridge.
- A checked twelve-month income statement with annual bridge.
- A linked price/demand/cost sensitivity with twelve changed rows.
- An actual-versus-static/flexible profit bridge and revision log.
Review and revise
Use these criteria to check your work and choose what to improve.
- Drivers: demand/capacity/price/cost assumptions are explicit.
- Aggregation: all 12 monthly rows reconcile annual profit.
- Scenarios: linked changes update rounding/capacity consistently.
- Evidence: actual/flexible/static bridges and historical revisions remain separate.
Want more background?
The idea in everyday life
Original fictional practice. All money is USD. No account, payment, personal record or outside participation is required. Original fictional service firm: monthly demand Jan.. Dec=80,90,100,110,120,130,140,150,160,170,180,190. Capacity 150 units/month; units=min(demand, capacity), no inventory/backlog. Each delivered unit earns 40 revenue and 22 variable cost; fixed operating expense 1,800/month and noncash depreciation 100/month. No interest, tax or owner withdrawal modeled. Revenue is earned on delivery, not payment arrival. January actual:90 units, price 38, variable cost 23/unit, fixed 1,800, depreciation 100. Linked price scenario: price 44, demand falls 10% rounded down to whole units, capacity 150; other costs initially fixed.
Actual-volume comparison distinguishes scale from price/cost deviation.
Compare forecast with actual results — complete worked case
Actual-volume comparison distinguishes scale from price/cost deviation.
Original fictional service firm: monthly demand Jan.. Dec=80,90,100,110,120,130,140,150,160,170,180,190. Capacity 150 units/month; units=min(demand, capacity), no inventory/backlog. Each delivered unit earns 40 revenue and 22 variable cost; fixed operating expense 1,800/month and noncash depreciation 100/month. No interest, tax or owner withdrawal modeled. Revenue is earned on delivery, not payment arrival. January actual:90 units, price 38, variable cost 23/unit, fixed 1,800, depreciation 100. Linked price scenario: price 44, demand falls 10% rounded down to whole units, capacity 150; other costs initially fixed.
Complete monthly drivers
Paste at A1.
| AMonth | BDemand | CCapacity | DUnits | ERevenue | FVariable cost | GFixed+depreciation | HProfit |
|---|---|---|---|---|---|---|---|
| 1 | 80 | 150 | 80 | 3200 | 1760 | 1900 | -460 |
| 2 | 90 | 150 | 90 | 3600 | 1980 | 1900 | -280 |
| 3 | 100 | 150 | 100 | 4000 | 2200 | 1900 | -100 |
| 4 | 110 | 150 | 110 | 4400 | 2420 | 1900 | 80 |
| 5 | 120 | 150 | 120 | 4800 | 2640 | 1900 | 260 |
| 6 | 130 | 150 | 130 | 5200 | 2860 | 1900 | 440 |
| 7 | 140 | 150 | 140 | 5600 | 3080 | 1900 | 620 |
| 8 | 150 | 150 | 150 | 6000 | 3300 | 1900 | 800 |
| 9 | 160 | 150 | 150 | 6000 | 3300 | 1900 | 800 |
| 10 | 170 | 150 | 150 | 6000 | 3300 | 1900 | 800 |
| 11 | 180 | 150 | 150 | 6000 | 3300 | 1900 | 800 |
| 12 | 190 | 150 | 150 | 6000 | 3300 | 1900 | 800 |
Copy as plain text
1. 6.1 Compare
Retain actual 90/38/23 sources and calculate modeled actual profit−550.
You should see: No annual forecasts replace observed january inputs.
2. 6.2 Compare
Flex original price/cost rules at 90 actual units to expected−280.
You should see: Volume comparison uses common activity.
3. 6.3 Compare
Bridge static−460 with volume+180, price−180, cost−90.
You should see: Bridge ends−550 exactly.
4. 6.4 Compare
Set next revision question: on what evidence should demand/price/cost assumptions change? Keep the original version.
You should see: A new projection does not overwrite historical evidence.
What to finish
An actual-versus-static/flexible profit bridge and revision log.
Watch for this
Calling lower actual profit solely a volume failure when price and unit cost also changed.
How can I tell I understand it?
Verify that your completed actual-versus-static/flexible profit bridge and revision log meets the three lesson-specific checks and retains the supporting original records.
Quick knowledge check
Answer all 3 questions. Get at least 2 right and the lesson completes automatically.
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Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.
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Sources and further reading
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Source & access notes · checked 2026-10-01
Read flexible/rolling budget roles and revision; a projection remains an assumption-led model, not evidence of future sales.
Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.
Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.
Source & access notes · checked 2026-10-01
Read static versus actual-volume comparison and interpretation. Original January price/unit-cost decomposition replaces source cases.
Access: Public primary page body opened and relevant sections read through the web reader on 2026-10-01; no account required for reading.
Reuse: Original Life Starter cases, datasets and questions; no source exercise or worked dataset reproduced. Links support further reading.
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