I.

Case Context & Background

With the fast shift of technological solutions globally, companies have been
consistently developing new products that matches customers need. With the
birth of digital revolution, analog technologies are being substituted by digital
technologies. Mechanical components are integrated in small microprocessor
chips that functions the same but has more capacity in specifications and smaller
in size.
In this case study, we will be focusing on Pelican Instruments. Pelican
Instrument Inc is one if the companies that provides industrial measurement
solutions. They create measuring devices that are used to measure voltages,
current, resistances, frequency and etc.
In their portfolio, they are manufacturing two main product lines; the Electric
Meter (EM), an outdated technology, and the Electronics instruments (EI), the
newer technology. Both of the products perform similar function. Therefore, the
products can be substitutes of each other. However, these products differ in their
manufacturing industry and their user platform.

In terms of measuring the

performance of each product, The Company assesses each products processes

and successes differently.
II. Statement of the Problem
Steve Park, the president and principal stockholder of Pelican Instruments Inc.,
was happy with the 1997 result that have exceeded their target profit by
$622,000 and called Amy Shultz, his assistant, to provide an analysis of the data
from the different department because he would like to feel the relative
contributions of R&D, Manufacturing and Marketing Department to the overall
success of the company.
From the standpoint of Amy Shultz, we are asked the following:

To prepare a report to be presented to Steve Park

From the Standpoint of the 6 different managers,

To present a case study if you are in the position of the 6 managers

(General Manager (EM), Marketing Manager (EM), Manufacturing

Manager (EM), General Manager (EI), Marketing Manager (EI),

Manufacturing Manager (EI)
Also, from the standpoint of Mr. Park,

How would he feel about the 1997 performance of each of the six
managers?

III. Framework for Analysis and Areas for Consideration

In order to evaluate the case and address the questions, the group
reviewed Pelicans Income Statement and other additional information. To
better analyze the provided information, the group will conduct a variance
analysis in analyzing each department.
The group will prepare a static and flexible budgeting variance analysis
that will isolate each sales of EI and EM and then evaluate again if it will be
used as a substitute for each other.