INSTRUCTIONS: You are required to work in your respective groups on the short project presented below. The project is due for submission on Tuesday, November 16, 2021. Please note that this project is based on the materials in Chapter 2,9 & 10 of your textbook. As outlined in your course syllabus, please note that each group member gets the same mark if all the group members participate equally, but if the group reports a malingerer, he or she gets a yellow card and his/her mark is reduced by 10%. If there is no improvement, the student (malingerer) will get a red card which means a zero mark. PROJECT QUESTIONS The two Vice Presidents in charge of sales and of production in Eleganza Company have together prepared two budgets - one optimistic, one pessimistic - for Roger Fererer, the President of the Company. The two budgets are shown in columns (1) and (2) below. The actual results are shown in column (3). The company's cost accountant was confused as to how to present an analysis. Consequently, he produced variances of actual results against both the optimistic projection and the pessimistic projection, columns (4) and (5), respectively. (1) (2) (5) Variance from Pessimistic Budget Optimistic Budget Pessimistic Budget Variance from Optimistic Budget Actual Results Units sold Sales 75,000 $750,000 135,000 $1,350,000 65,000 $ 650,000 (60,000) S(600,000) Direct materials Direct labor Indirect labor Maintenance Supplies Power Heat Light Rent Insurance 200,000 $2,000,000 $ 200,000 400,000 106,000 20,000 28,000 160,000 50,000 7,000 80,000 20,000 $ 75,000 150,000 43,500 20,000 15,500 60,000 50,000 4,500 80,000 13,750 $ 140,000 285,000 72,000 22,000 21,000 108,000 53,000 5,900 80,000 17,000 $ 60,000) (115,000) (34,000) 2,000 (7,000) (52,000) 3,000 (1,100) $ 65,000 135,000 28,500 2,000 5,500 48,000 3,000 1,400 -0- 3,250 (3,000) REQUIRED: 1. Roger is baffled by the analysis. He has asked your group for a more understandable performance report. In the columns below, in clear and orderly fashion, prepare a new report. Explain your work to the President. Show all supporting computations as needed. Line Item Units sold Sales Actual Results 135,000 $1,350,000 Sales or Cost Function Revised Budget 135,000 $1,350,000 Variance 0 $0 y = $10X $ 135,000 $ 5,000U Direct materials Direct labor Indirect labor $ 140,000 285,000 72,000 y = SIX y = $2x y = $6,000+ $0.50X 2. Meanwhile, Serena Williams, Controller, has gathered data on overhead costs and direct labor-hours over the past 12 months. List and discuss the different approaches Serena can use to estimate a cost function for overhead costs using direct labor-hours as the cost driver. INSTRUCTIONS: You are required to work in your respective groups on the short project presented below. The project is due for submission on Tuesday, November 16, 2021. Please note that this project is based on the materials in Chapter 2,9 & 10 of your textbook. As outlined in your course syllabus, please note that each group member gets the same mark if all the group members participate equally, but if the group reports a malingerer, he or she gets a yellow card and his/her mark is reduced by 10%. If there is no improvement, the student (malingerer) will get a red card which means a zero mark. PROJECT QUESTIONS The two Vice Presidents in charge of sales and of production in Eleganza Company have together prepared two budgets - one optimistic, one pessimistic - for Roger Fererer, the President of the Company. The two budgets are shown in columns (1) and (2) below. The actual results are shown in column (3). The company's cost accountant was confused as to how to present an analysis. Consequently, he produced variances of actual results against both the optimistic projection and the pessimistic projection, columns (4) and (5), respectively. (1) (2) (5) Variance from Pessimistic Budget Optimistic Budget Pessimistic Budget Variance from Optimistic Budget Actual Results Units sold Sales 75,000 $750,000 135,000 $1,350,000 65,000 $ 650,000 (60,000) S(600,000) Direct materials Direct labor Indirect labor Maintenance Supplies Power Heat Light Rent Insurance 200,000 $2,000,000 $ 200,000 400,000 106,000 20,000 28,000 160,000 50,000 7,000 80,000 20,000 $ 75,000 150,000 43,500 20,000 15,500 60,000 50,000 4,500 80,000 13,750 $ 140,000 285,000 72,000 22,000 21,000 108,000 53,000 5,900 80,000 17,000 $ 60,000) (115,000) (34,000) 2,000 (7,000) (52,000) 3,000 (1,100) $ 65,000 135,000 28,500 2,000 5,500 48,000 3,000 1,400 -0- 3,250 (3,000) REQUIRED: 1. Roger is baffled by the analysis. He has asked your group for a more understandable performance report. In the columns below, in clear and orderly fashion, prepare a new report. Explain your work to the President. Show all supporting computations as needed. Line Item Units sold Sales Actual Results 135,000 $1,350,000 Sales or Cost Function Revised Budget 135,000 $1,350,000 Variance 0 $0 y = $10X $ 135,000 $ 5,000U Direct materials Direct labor Indirect labor $ 140,000 285,000 72,000 y = SIX y = $2x y = $6,000+ $0.50X 2. Meanwhile, Serena Williams, Controller, has gathered data on overhead costs and direct labor-hours over the past 12 months. List and discuss the different approaches Serena can use to estimate a cost function for overhead costs using direct labor-hours as the cost driver