...Il mobile 8:23 AM 90% X Individual Assignment I - Case - (E... Nice-C-Tees Corporation is a private corporation formed in 2005 for the purpose of selling chocolate products to local and regional supermarkets. Nice-C-Tees Corporation is located in Central Trinidad and has a warehouse in Arima. Their mission is to start manufacturing their chocolates with local ingredients to give it a Trini flavour. They hope to be an all-round service of producing and selling and to be the premier chocolatier in the Caribbean. Nice-C-Tees Corporation is a family owned business, with Mr Harry Boume as CEO. The team comprise of Mr Bourne's brother, James Bourne, the chocolatier who studied at the Trinidad and Tobago Hospitality and Tourism Institute. The other departments are managed by employees who have been working with them from inception. In 2010, the employees with their Trade Union representative, negotiated a 5-day work week for all employees. As at the end of 2008. Nice-C- Tees used Traditional Costing System, which they found to be inefficient. As at January 2009, they switched to Activity Based Costing System and has been using it ever since. Due to the switch in costing methods, Nice-C-Tees used multiple cost drivers, which has a direct cause/effect relationship in its applied overhead costs. The company just signed two contracts to supply the Mega Chain Supermarkets and Value Chain Supermarkets. The Sales and Marketing Manager Mark Ford is planning for the new year in terms of production needs to meet the company's sales demand. He is also trying to determine ways in which the company's profits might be increased in the new year. December 2019, they marketed a dark chocolate which the company sold 712,000 boxes at an average price of $15.50 per box. The variable expenses were $5.200,200 and the fixed expenses were $820,000. The Christmas season usually has special orders from various clients. Nice-C-Tees has a sales mix of different types of chocolates, with a fixed cost of $6,500,000. They are white, dark and pure, All three types are in high demand both locally and regionally. They are in talks to expand to the international market. Currently the marketing Manager is doing marketing research to determine their potential customer base. With all of the extra work one of the chocolate machines have been doing, Nice-C-Tees is looking at an option to either retain or replace the main machine. The operations manager estimates that the existing machine still has 2 more years of useful life. This machine produces 50 units and sells 50 units per day, whereas the possible replacement machine produces twice that much. ..Il mobile 8:24 AM 89% X Individual Assignment I - Case - (E... Sales are equal to production on these units, and production runs for 52 weeks each year. The replacement machine would have a 2-year useful life. The Finance Manager, held a meeting with all department heads and the CEO on the operational budgets and to present a cash flow position of the company. They are trying to maintain cash flow of a minimum balance of $6.000.000 in order for the business to fund the requirements of each department. Nice-C-Tees has an agreement with the bank that loans taken must be in increments of 1,000 at 8% interest. Any loan taken will become due at the end of the calendar year. At the end of the month, each department has to provide their budget to the committee for review and approval. During the meeting, the Manufacturing Manager highlighted there were some discrepancies with what they budgeted and their actual and that they needed to try to be more accurate when budgeting. The report presented showed a wide variance in costs between the budget and actual figures for the month of October. The CEO requested a cost of Goods Manufactured Schedule to supplement the Production Report that he wants to take to the Board of Directors meeting. It was noted that the materials purchased during the period was 45% of the beginning raw materials total. The Finance Manager noticed there are discrepancies with budgeted figures and what was reported in the last quarter of the Management Accounts. The Finance Manager is asking for answers. All the Production Manager remembers is that both the budget and actual fixed cost were $100,000 A Directive given from the Board of Directors is to plan for the first three months of 2020. There are several budgets which must be completed for the company to formalize an operational strategy for cash, material purchases etc. the meeting ended with all managers agreeing to submit the required documents. ***This is a comprehensive case on Nice-C-Tee Corporation. The data to answer the questions for your assignment, are to be extracted from within the case and also Appendix I and II on this paper." ..Il mobile 8:26 AM 88% X Individual Assignment I - Case - (E... E Appendix 1 White Chocolate Dark Chocloate Pure Chocolate Sales Mix 50.00% 30.00% 20.00% Contribution Margin Ratio 40.00% 60.00% 70.00% Total Driver per Volume Activity Cost Pool Issuing Purchase Orders Delivery Orders Estimated Overhead SI50,000 S160,000 50,000 20,000 Packaging S450,000 100.000 Cost Driver No. of Purchase Orders No. of Reams No. of Orders Delivered Activity Cost Pool Issuing Purchase Orders Delivery Orders Packaging Dark Chocolate 125 150 160 White Chocolate 180 400 350 Pure Chocolate 160 325 300 Raw Materials Data Beginning Ending $1,250,000 S24.500 Work in Process Beginning Ending Manufacturing Overhead $89,000 S16,000 $215,000 Direct Labour 824,000.00 Old Machine New Machine Production Cost per unit Sales Cost per unit Production in units (Old Machine) s 80,000.00 s 55.000.00 s s 6.50 8.50 Sale in Units (Old Machine) 50.00 50.00 ...Il mobile 8:27 AM 88% X Individual Assignment - Case - (E... Appendix II Expected Lnie Sale November December 474,667 712,000 January's sales increases by 50% incrementally cach month 10% following month's production Desired Ending Finished Goods: requirements January's Beginning finished goods: 10% of Estimated first quarter sales Desired Ending Direct Materials (lbs): 5% next month's production January's Beginning Direct Materials Lbs): 10% Estimated first quarter's production Direct Materials per unit. Direct Materials cost per lb. 2 lbs $0.75 Collection Contract Schedule 60% in the same month of sale 30% in the next month of sale 10% two months after sale Scheduled Payments 50% in the month of purchase 50% in the next month of purchase s 1.40 Selling & Administrative Variable Expenses per Unit Fixed Expenses Advertising Insurance Salaries Depreciation Other 15,000.00 1,400.00 12,000.00 2,200.00 3,000.00 Total Direct Labour Cost January February March $ 4,037,040.00 6,055,560.00 9,788,400.00 Total Indirect Labour Hours January February March 224 280 336,420 435,040 ...Il mobile 8:27 AM 88% X Individual Assignment 1 - Case - (E... E Manufacturing Overhead per month Indirect Materials 30 cents per labour hour Indirect Labour 50 cents per labour hour Utilities 45 cents per labour hour Maintenance 25 cents per labour hour Salaries 42,000.00 Property Taxes 2,675.00 Insurance 1,200.00 Maintenance 1,300.00 Depreciation per month using new machine cost (rounded) Comparative Figures - Quarter Ending December 2019 Budgeted Units Actual Units 10,000.00 8,000.00 Budgeted Variable Costs Direct Labour Direct Materials Manufacturing Overhead Variable Costs - Other 50,000.00 60,000.00 75,000.00 62,000.00 Actual Variable Costs Direct Labour Direct Materials Manufacturing Overhead Variable Costs - Other 40,000.00 63,500.00 55,000.00 29.600.00 88% ...l bmobile 8:25 AM X Individual Assignment I - Case - (E... E 1. Determine the overhead rates and the actual cost assigned for each of the activity cost pools using ABC system. (6 Marks) 2. Prepare a cost of goods Manufactured. (4 Marks) 3. You are to prepare the weighted average contribution margin ratio and breakeven point in dollars for the company using their sale mix. (4 Marks) 4. What is the Dark Chocolate product's 1) contribution margin ratio? (Round to nearest whole percentage). (*) Income (ili) contribution margin per unit. For December month (5 Marks) 5. What is the company's break-even point in units and in dollars for this product? (2 Marks) 6. If management wanted to increase its income from this product (Dark Chocolate) by 6.5%, how many additional units would have to be sold to reach this income level? (4 Marks) 7. Prepare schedules to the Operations Manager, showing the (1) consequences of Nice-C-Tees replacing the machine and (i) any gain or loss from based in part (0) (10 Marks) 8. For each department a budget has to be prepared. Prepare budgets for the following: (59 Marks) (a) Sales (b) Production (c) Direct Materials (d) Manufacturing Overhead (e) Seling and Administrative () Collections (9) Payments (h) Cash 9.) Prepare a flexible Budget at the level of 8,000 units (1) prepare a flexible budget variance report for quarter ending December 2019. (6 marks) ...Il mobile 8:23 AM 90% X Individual Assignment I - Case - (E... Nice-C-Tees Corporation is a private corporation formed in 2005 for the purpose of selling chocolate products to local and regional supermarkets. Nice-C-Tees Corporation is located in Central Trinidad and has a warehouse in Arima. Their mission is to start manufacturing their chocolates with local ingredients to give it a Trini flavour. They hope to be an all-round service of producing and selling and to be the premier chocolatier in the Caribbean. Nice-C-Tees Corporation is a family owned business, with Mr Harry Boume as CEO. The team comprise of Mr Bourne's brother, James Bourne, the chocolatier who studied at the Trinidad and Tobago Hospitality and Tourism Institute. The other departments are managed by employees who have been working with them from inception. In 2010, the employees with their Trade Union representative, negotiated a 5-day work week for all employees. As at the end of 2008. Nice-C- Tees used Traditional Costing System, which they found to be inefficient. As at January 2009, they switched to Activity Based Costing System and has been using it ever since. Due to the switch in costing methods, Nice-C-Tees used multiple cost drivers, which has a direct cause/effect relationship in its applied overhead costs. The company just signed two contracts to supply the Mega Chain Supermarkets and Value Chain Supermarkets. The Sales and Marketing Manager Mark Ford is planning for the new year in terms of production needs to meet the company's sales demand. He is also trying to determine ways in which the company's profits might be increased in the new year. December 2019, they marketed a dark chocolate which the company sold 712,000 boxes at an average price of $15.50 per box. The variable expenses were $5.200,200 and the fixed expenses were $820,000. The Christmas season usually has special orders from various clients. Nice-C-Tees has a sales mix of different types of chocolates, with a fixed cost of $6,500,000. They are white, dark and pure, All three types are in high demand both locally and regionally. They are in talks to expand to the international market. Currently the marketing Manager is doing marketing research to determine their potential customer base. With all of the extra work one of the chocolate machines have been doing, Nice-C-Tees is looking at an option to either retain or replace the main machine. The operations manager estimates that the existing machine still has 2 more years of useful life. This machine produces 50 units and sells 50 units per day, whereas the possible replacement machine produces twice that much. ..Il mobile 8:24 AM 89% X Individual Assignment I - Case - (E... Sales are equal to production on these units, and production runs for 52 weeks each year. The replacement machine would have a 2-year useful life. The Finance Manager, held a meeting with all department heads and the CEO on the operational budgets and to present a cash flow position of the company. They are trying to maintain cash flow of a minimum balance of $6.000.000 in order for the business to fund the requirements of each department. Nice-C-Tees has an agreement with the bank that loans taken must be in increments of 1,000 at 8% interest. Any loan taken will become due at the end of the calendar year. At the end of the month, each department has to provide their budget to the committee for review and approval. During the meeting, the Manufacturing Manager highlighted there were some discrepancies with what they budgeted and their actual and that they needed to try to be more accurate when budgeting. The report presented showed a wide variance in costs between the budget and actual figures for the month of October. The CEO requested a cost of Goods Manufactured Schedule to supplement the Production Report that he wants to take to the Board of Directors meeting. It was noted that the materials purchased during the period was 45% of the beginning raw materials total. The Finance Manager noticed there are discrepancies with budgeted figures and what was reported in the last quarter of the Management Accounts. The Finance Manager is asking for answers. All the Production Manager remembers is that both the budget and actual fixed cost were $100,000 A Directive given from the Board of Directors is to plan for the first three months of 2020. There are several budgets which must be completed for the company to formalize an operational strategy for cash, material purchases etc. the meeting ended with all managers agreeing to submit the required documents. ***This is a comprehensive case on Nice-C-Tee Corporation. The data to answer the questions for your assignment, are to be extracted from within the case and also Appendix I and II on this paper." ..Il mobile 8:26 AM 88% X Individual Assignment I - Case - (E... E Appendix 1 White Chocolate Dark Chocloate Pure Chocolate Sales Mix 50.00% 30.00% 20.00% Contribution Margin Ratio 40.00% 60.00% 70.00% Total Driver per Volume Activity Cost Pool Issuing Purchase Orders Delivery Orders Estimated Overhead SI50,000 S160,000 50,000 20,000 Packaging S450,000 100.000 Cost Driver No. of Purchase Orders No. of Reams No. of Orders Delivered Activity Cost Pool Issuing Purchase Orders Delivery Orders Packaging Dark Chocolate 125 150 160 White Chocolate 180 400 350 Pure Chocolate 160 325 300 Raw Materials Data Beginning Ending $1,250,000 S24.500 Work in Process Beginning Ending Manufacturing Overhead $89,000 S16,000 $215,000 Direct Labour 824,000.00 Old Machine New Machine Production Cost per unit Sales Cost per unit Production in units (Old Machine) s 80,000.00 s 55.000.00 s s 6.50 8.50 Sale in Units (Old Machine) 50.00 50.00 ...Il mobile 8:27 AM 88% X Individual Assignment - Case - (E... Appendix II Expected Lnie Sale November December 474,667 712,000 January's sales increases by 50% incrementally cach month 10% following month's production Desired Ending Finished Goods: requirements January's Beginning finished goods: 10% of Estimated first quarter sales Desired Ending Direct Materials (lbs): 5% next month's production January's Beginning Direct Materials Lbs): 10% Estimated first quarter's production Direct Materials per unit. Direct Materials cost per lb. 2 lbs $0.75 Collection Contract Schedule 60% in the same month of sale 30% in the next month of sale 10% two months after sale Scheduled Payments 50% in the month of purchase 50% in the next month of purchase s 1.40 Selling & Administrative Variable Expenses per Unit Fixed Expenses Advertising Insurance Salaries Depreciation Other 15,000.00 1,400.00 12,000.00 2,200.00 3,000.00 Total Direct Labour Cost January February March $ 4,037,040.00 6,055,560.00 9,788,400.00 Total Indirect Labour Hours January February March 224 280 336,420 435,040 ...Il mobile 8:27 AM 88% X Individual Assignment 1 - Case - (E... E Manufacturing Overhead per month Indirect Materials 30 cents per labour hour Indirect Labour 50 cents per labour hour Utilities 45 cents per labour hour Maintenance 25 cents per labour hour Salaries 42,000.00 Property Taxes 2,675.00 Insurance 1,200.00 Maintenance 1,300.00 Depreciation per month using new machine cost (rounded) Comparative Figures - Quarter Ending December 2019 Budgeted Units Actual Units 10,000.00 8,000.00 Budgeted Variable Costs Direct Labour Direct Materials Manufacturing Overhead Variable Costs - Other 50,000.00 60,000.00 75,000.00 62,000.00 Actual Variable Costs Direct Labour Direct Materials Manufacturing Overhead Variable Costs - Other 40,000.00 63,500.00 55,000.00 29.600.00 88% ...l bmobile 8:25 AM X Individual Assignment I - Case - (E... E 1. Determine the overhead rates and the actual cost assigned for each of the activity cost pools using ABC system. (6 Marks) 2. Prepare a cost of goods Manufactured. (4 Marks) 3. You are to prepare the weighted average contribution margin ratio and breakeven point in dollars for the company using their sale mix. (4 Marks) 4. What is the Dark Chocolate product's 1) contribution margin ratio? (Round to nearest whole percentage). (*) Income (ili) contribution margin per unit. For December month (5 Marks) 5. What is the company's break-even point in units and in dollars for this product? (2 Marks) 6. If management wanted to increase its income from this product (Dark Chocolate) by 6.5%, how many additional units would have to be sold to reach this income level? (4 Marks) 7. Prepare schedules to the Operations Manager, showing the (1) consequences of Nice-C-Tees replacing the machine and (i) any gain or loss from based in part (0) (10 Marks) 8. For each department a budget has to be prepared. Prepare budgets for the following: (59 Marks) (a) Sales (b) Production (c) Direct Materials (d) Manufacturing Overhead (e) Seling and Administrative () Collections (9) Payments (h) Cash 9.) Prepare a flexible Budget at the level of 8,000 units (1) prepare a flexible budget variance report for quarter ending December 2019. (6 marks)