... cater for a range of
products and no single product decision will cause the business to amend it.
Required:
(a) Prepare a summary of information that would help with the pricing decision for the ... decision on the price to charge for the new machine, two pieces of
information have been collected:
Activity 5.8
‘
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Pricing...
... information a banker would require from Prolog Ltd before granting
additional overdraft facilities for the anticipated expansion of sales.
6. 7
CHAPTER 6 BUDGETING
214
M 06_ ATRI 362 2_ 06_ SE_C 06. QXD ... control?
What is a budget committee? What purpose does it serve?
6. 4
6. 3
6. 2
6. 1
Exercises 6. 5 to 6. 8 are more advanced than 6. 1 to 6. 4. Those with coloured numbers ha...
... £000
Sales revenue 534 254 183 97
Variable cost (344) ( 167 ) (117 ) (60 )
Contribution 190 87 66 37
Fixed cost (rent and so on) (138) ( 46 ) ( 46 ) ( 46 )
Profit/(loss) 52 41 20 (9)
Now it is obvious that ... p. 59
Break-even analysis p. 60
Break-even chart p. 61
Break-even point (BEP) p. 61
Contribution per unit p. 66
Contribution margin ratio p. 67
Margin of safety p. 67
Op...
... acceptable.
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It is important to remember that the decision whether to invest in the machine
must be taken before any of these things are known. For example, ... profit before depreciation 20
2 years’ time Operating profit before depreciation 40
3 years’ time Operating profit before depreciation 60
4 years’ time Operating profit...
... approval.
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Strategic management
accounting
Businesses are increasingly being managed along strategic lines. By this we mean
that strategies adopted by a business ... the business operates when we are undertaking
a position analysis or when we are formulating plans for the future. Management
What is strategic management acc...
... flows Discount factor Present value
£ @ 16% £
1 18,000 0. 862 15,5 16
2 18,000 0.743 13,374
3 25,000 0 .64 1 16, 025
4 50,000 0.552 27 ,60 0
5 60 ,000 0.4 76 28, 560
101,075
Initial investment (90,000)
Net ... division within the same business and
part to outside customers. For a business with only two divisions, the position will be
as set out in Figure 10 .6.
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