Kindly answer the 3 questions specially the excel cacululations Chapter 13 Contr

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Kindly answer the 3 questions specially the excel cacululations

Chapter 13 Controls for Differentiated Strategies 593 Pelican Instruments, Inc. 1 Steve Park, president and principal stockholder of Pelican Instruments, Inc., sat at his desk reflecting on the 1997 results (Exhibit 1). For the second year in succession, the company had exceeded profit budget. Steve Park was obvi- ously very happy with the 1997 results. All the same, he wanted to get a better feel for the relative contributions of the R&D;, manufacturing, and markcting departments in this overall success. With this in mind, he called his assistant, a recent graduate of a well-known busincss school, into his office "Amy," he began, "as you can see from our recent financial results, we have excecded our profit targets by $622,000. Can you prepare an analysis showing how much R&D;, manufacturing, and marketing contributed to this overall favorable profit variance?" Amy Shultz, with all tho fervor of a recent convert to professional manage- ment, set to her task immediately. She collected the data (Exhibit 2) and was wondering what her next step should be. Pelican Instrument's products can be grouped into two main lines of busi- ness: electric meters (EM) and electronic instruments (EI). Both EM and EI are industrial measuring instruments and perform similar functions. How ever, these products differ in their manufacturing technology and their end-use characteristics. EM is based on mechanical and electrical technology, whereas El is based on microchip technology. EM and EI are substitute products in the same sense that a mechanical watch and a digital watch are substitutes. Pelican Instruments uses a variable costing system for internal reporting I. Prcpare the report that you fcel Amy Shultz should present to Mr. Park. 2. Put yourself in the position of the following six managers: general manager (EM); marketing manager (EM; manufacturing manager (EM); general manager (lE); marketing manager (ED; manufacturing manager (EI). These EXHIBIT 1 Income Statement for the Year 1997 ai, -Budget(000s)..m ·A·Actual (000s). $16872706 ess: Other operating expenses. Administration This case wasprepared by Vijay Govindarajan and John K Shank, The Amos Tuek School of Business Administration, Dartmouth College. Copyright

Explanation / Answer

1 Electric Meters (EM) Electronic Instru.(EI) Total Budget Actual Budget Actual Budget Actual Sales Volume 124800 141770 66000 62172 190800 203942 Selling Price 40 30 180 206 Total sales value 4992000 4253100 11880000 12807432 16872000 17060532 Less: Variable Mfg. cost Per unit 20 21 50 54 Total mfg.costs 2496000 2977170 3300000 3357288 5796000 6334458 Contribution Per unit 20 9 130 152 Total contn. 2496000 1275930 8580000 9450144 11076000 10726074 Less: Fixed costs Mfg. 3872000 3530000 Mktg. 1856000 1440000 Admn. 1340000 1674000 R&D 1480000 932000 Total fixed costs 8548000 7576000 PBT 2528000 3150074 2. Electric Meters (EM) Electronic Instru.(EI) Total Budget Actual Budget Actual Budget Actual Sales Volume 124800 141770 66000 62172 190800 203942 F Selling Price 40 30 180 206 Total sales value 4992000 4253100 11880000 12807432 16872000 17060532 F Less:Mfg. Mgr.costs Variable Mfg. cost Per unit 20 21 50 54 Total Var. mfg.costs 2496000 2977170 3300000 3357288 5796000 6334458 UF Fixed mfg. costs 3872000 3530000 F Total Mfg. costs 2496000 2977170 3300000 3357288 9668000 9864458 UF Less: GM admn. Costs 1340000 1674000 UF Less: Mktg. Mgr. Costs 1856000 1440000 F Less: R&D costs 1480000 932000 1480000 932000 F PBT 2496000 1275930 7100000 8518144 2528000 3150074 F 3. Bonus can be considered Mkg. Mgr.for exceeding overall budget sales value. Mfg. mgr. for lower overall fixed mfg. costs Mktg. mgr. for lower overall fixed mktg. costs R&D mgr. for lower than budget R&D costs In addition: General mgr. has to explain the sizeable variance in admn.costs(1674-1340)=334('000s) EM-Mktg. has to give reason for lower selling price/unit than forecasted.(30180) EI-Mfg. --to explain the difference of $ 4 per unit in variable mfg.cost EM & EI-mktg. --to explain reasons fro difference in the market share

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