Lycamobile LTE 15:55 83 %. AC201 Fall 2017 Project.pdf REQUIRED: Comment on the
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Lycamobile LTE 15:55 83 %. AC201 Fall 2017 Project.pdf REQUIRED: Comment on the situation at Holly Cow, using some of the terms and concepts from the chapter CASE 12.2 FLEXIBLE BUDGETS AND PERFORMANCE EVALUATION. Fine Metals, Inc. is a wholesaler of precious metals. The company maintains two key product lines gold and slver The company keeps the metals in both colns and bars and sells to both the investing market and the various industries that use silver in their manfacturing process. Keith Boiton, president of Fine Metals, Inc, has assigned responsibility for sales to three managers one in charge of goild sales to investors(Joy Barnes), one neharge of silver sales to investors Oete Bake. and one ncharge of industrial sales of silver Cloey Michaels). Each subdivision of the business develops its own budget which is then "Tlexed" to develop variances once a sales period has ended. This variance analysis is used to judge the performance of the three managers The following table contains the key infor- mation for the three branches of the business for the labest year. No inventory changes have taken place as the company buys only what it sels in an arbitrage market-it does not really hold any inventory on hand. The reults ae Fine Metals, Inc. The company does not have enough sales to realty influence the trends in the marketplace Individual managers,however, can be more or less successful at moving their products, using mar- keting pitches on major television networks and radio programs to move the product into the marketplace. Silver induserial sales are an exception to this type of marketing. Hene, the marketing dolars need bo go into trade shows and trade publications, including the buyers guides that pur- chasing agents use when making purchases for their compeny Iit is a very diferent business from the investing side of the house, facing difflerent types of compeition. Market demand is much steadier for industrial sales, alsa, as companies that make products using siver are fairly large and reliable consumers of the siver ingots, Industrial sales can buy in larger quantities, driving down ts acquisition costs as compared to the other two products 672 MANAGEMENT ACCOUNTING 1 n3 2 The oold market is volatile. with annual price swings beina significant When economies get in KypcblExplanation / Answer
a.
b.
c.
The flexible bugdget will give a more realisitc figures for comparison becasue the budget is flexed as per the actual output achieved which gives correct data for analysis.
Gold Investment Data Silver Investment Data Silver Industrial Data Budget Actual Actual Vs Budget Actual Actual Vs Budget Actual Actual Vs Per ounce Total Per ounce Total Budget Per ounce Total Per ounce Total Budget Per ounce Total Per ounce Total Budget Sales in ounces 1200000 1150000 2500000 2850000 3425000 3500000 Sales value 1580.00 1896000000 1490.0 1713500000 -182500000 26.25 65625000 26.50 75525000 9900000 26.25 89906250 26.50 92750000 2843750 Variable acquisition cost 35.00 42000000 38.8 44562500 2562500 10.00 25000000 11.00 31350000 6350000 9.00 30825000 9.25 32375000 1550000 Fixed acquisition costs 250000000 257500000 7500000 10500000 12000000 1500000 20500000 19500000 -1000000 Variable S G & A costs 40.50 48600000 42.0 48300000 -300000 12.00 30000000 12.50 35625000 5625000 10.00 34250000 9.50 33250000 -1000000 Fixed S G & A costs 40000000 45000000 5000000 3750000 3500000 -250000 4250000 4500000 250000 Total costs 380600000 395362500 14762500 69250000 82475000 13225000 89825000 89625000 -200000 Net operatin income 1515400000 1318137500 -197262500 -3625000 -6950000 -3325000 81250 3125000 3043750Related Questions
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