Any Kind of Plagiarism (Cheating, Copying, Googling Etc.) Will Lead Towards A Straight 0 (Zero) in The

ACT202 Sec: 17 & 18 Sys
Term Report I Case Analysis
Read the instructions carefully and proceed with the Group Assignment
 This group report should be prepared in a group of 3 to 5 students and carry 15% of the total
grade.
 The deadline of submission is Monday, December 15, 2014 by 2 P.M.
 Late submission will be penalized with 10% deduction each day after the deadline.
 Any kind of plagiarism (cheating, copying, googling etc.) will lead towards a straight 0 (zero) in the
Group report weight.
 The report should be computer typed in MS Word
Read the following case and answer the required questions:

Manasee Atre is an award-winning innovator who makes educational toys for preschool children.
Manasee’s company, which she whimsically named Pumpkin Patch, makes plastic pieces that can be
assembled to create imaginative animal and human models. The standard set consists of several types of
“head gear,” “noses,” “eyes,” “ears,” “arms and legs,” as well as “foot wear.” The deluxe set adds to the
number of options under each category.
For the second half of 2014, estimated sales in units for each set are as follows:
Month Standard Deluxe

July 10,000 3,500
August 11,400 4,000
September 12,000 4,500
October 15,600 5,000
November 18,000 5,500
December 22,000 6,000
January, 2015 18,000 4,200
Manasee provides you with the following additional information:

Sales price: The actual sales for May and the forecasted sales for June were $150,000 and $155,000,
respectively, for the standard set. The relevant numbers for the deluxe set are $70,000 (May sales) and
$65,000 (June sales).
Manasee prices the standard set at $17 per unit and the deluxe set at $26 per unit.
Inventory policy for finished goods: Manasee’s policy for finished goods inventory is to stock 25% of the
forecasted demand for the next month. As of June 30, Manasee expects to have 2,500 units of the standard
set and 875 units of deluxe set in stock. These inventories were valued at $12.00 and $17.00 per unit,
respectively. Pumpkin Patch uses the FIFO (First-In-First-Out) method to value its inventories.
The company’s long-term plans call for it to have 4,000 units of the standard set and 1,000 units of the
deluxe set on January 31, 2015.
Production requirements: The standard set consumes 1 pound of plastic per unit, whereas the deluxe set
consumes 1.50 pounds of plastic per unit. Plastic costs $3.00 per pound.
The cost of all other materials is $1.00 per unit for the standard set and $1.25 per unit for the deluxe set.
The standard set requires 0.50 direct labor hours per unit, and the deluxe set requires 0.75 labor hours per
unit. Labor costs $16 per hour.
Fixed manufacturing overhead is expected to be $48,000 per month. Of this amount, $22,000 represents
depreciation and other noncash expenses. Pumpkin Patch does not have any variable manufacturing
overhead.
ACT202 Sec: 17 & 18 Sys
Term Report I Case Analysis
Inventory policy—raw materials: With regard to the plastic used to produce each set, Manasee likes to
have an ending materials inventory to meet all of the material needs for the next month’s anticipated
production.
Pumpkin Patch expects to have 13,000 pounds of plastic in inventory as of June 30, 2014. ( Note: The
beginning inventory does not follow the stated stocking policy exactly.)
Manasee’s long-term plans call for her to have 10,000 pounds of plastic in inventory as of January 31, 2015.
Payables policy: Pumpkin Patch pays for half of its material purchases in the month of purchase and the
remainder the following month.
Accounts payable for materials and other items were expected to be $19,500 on June 30, 2014.
All other materials are purchased on a cash basis during the month when they are used.
Collection policy: For both the standard and deluxe set, 40 percent of any month’s sales are for cash. Ten
percent of the credit sales are collected in the month of sale, 70% are collected the following month, and
18% are collected in the second month after the sale. The remaining 2% of receivables are deemed
uncollectible.
Sales and administration costs: Monthly nonmanufacturing expenses consist of the following:
Salaries and wages $3,000
Commissions 6% of sales revenue
Rent $7,000
Other expenses 4% of sales revenue
Depreciation $1,500 (for office equipment)
Except depreciation, all nonmanufacturing expenses are paid in cash when incurred.
Cash and financing: Pumpkin Patch maintains a minimum cash balance of $15,000. Borrowing can make up
any anticipated shortfalls. Ignore interest on the loan in your calculations. For simplicity, assume that the
bank will only lend (and accept repayments) in $1,000 increments. (Minimize the amount borrowed,
however.) Cash on hand on June 30 is expected to be $16,000.
Special items for cash budget: Pumpkin Patch needs to make a payment of $15,000 during July for
equipment previously purchased on credit. The firm also has scheduled a dividend payment of $20,000 in
September.
Required:
1. Prepare the following Budgets for Pumpkin Patch for the months (July, August, September, October,
November & December) and Half-year ended in 2014.
i. The Sales Budget

ii. The Production Budget
iii. The Direct Materials Budget
iv. The Direct Labor Budget
v. Manufacturing Overhead Budget
vi. Ending Finished Goods Inventory Budget
vii. Selling & Administrative Expense Budget
viii. The Cash Budget
ix. The Budgeted Income Statement
2. Prepare the following Schedules:
i. Expected Cash Collections

ii. Expected Cash Disbursement for Materials

Any Kind of Plagiarism (Cheating, Copying, Googling Etc.) Will Lead Towards A Straight 0 (Zero) in The

Uploaded by

Copyright:

Available Formats

Any Kind of Plagiarism (Cheating, Copying, Googling Etc.) Will Lead Towards A Straight 0 (Zero) in The

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Any Kind of Plagiarism (Cheating, Copying, Googling Etc.) Will Lead Towards A Straight 0 (Zero) in The

Uploaded by

Copyright:

Available Formats

ACT202 Sec: 17 & 18 Sys

Term Report I Case Analysis

Read the following case and answer the required questions:

Month Standard Deluxe

Manasee provides you with the following additional information:

i. The Sales Budget

2. Prepare the following Schedules:

i. Expected Cash Collections

You might also like