MANAGING BUSINESS PERFORMANCE

MANAGING BUSINESS PERFORMANCE

  

MANAGING BUSINESS PERFORMANCE:    

For Help on this assignment mail us at teamparker688@gmail.com

 

ASSIGNMENT QUESTION

 

You are planning to start a new footwear business. You have decided to carry out a detailed Cost Volume Profit analysis of your proposed new business. You have spent many months researching your new footwear product and you are ready to produce an estimated marginal costing statement. You are particularly concerned about uncertainty, so you know that this means you will need to produce more than one set of estimated data.

 Required:

  1. Decide on a selling price and a sales volume for your first year of trading and then construct a marginal costing statement using this data. Set your variable cost at 25% of your selling price and your net profit at 20% of your total sales. Present your statement in a ‘per unit’ and ‘total year’ format.

 

 

  1. Produce re-drafted marginal costing statements for each of the following scenarios:
  2. Increase your original selling price by 15%
  3. Reduce your original selling price by 15%
  4. Using your original selling price, reduce variable costs to 20% of the selling price
  5. Using your original selling price, increase variable costs to 30% of the selling price

 

please note Fixed Cost must remain the same for all the scenario

 

 

  1. For each of your 5 marginal costing statements calculate:

  2. Break-Even in units and sales

  3. Margin of Safety in units and as a percentage (if applicable)

  4. Net Profit as a percentage

 

For Help on this assignment mail us at teamparker688@gmail.com

  1. Discuss the data you have produced, focussing on the issue of uncertainty.

What has the data you have produced shown you about the impact of changes in price and variable cost on your proposed business?

What are the limitations of the data you a have produced?

What additional analysis could you carry out to make sure that your proposed business is as prepared as it can be to manage uncertainty.

Your answer must include discussion of the following:

– Sensitivity Analysis

– Operational Leverage

– Scenario Testing

1,250 words, 50 marks

 

 

 

Additional instructions for the interim assignment:

  • Fixed Costs should remain the same for all versions of the marginal costing statement
  • For tasks 2 a) and 2b) change the selling price only, variable and fixed costs should remain the same as on the master marginal costing statement. Calculate new contribution and profit.
  • For task 2c) and 2d) change the variable cost only, selling price and fixed costs should remain the same as on the master marginal costing statement. Calculate new contribution and profit.

 

 For Help on this assignment mail us at teamparker688@gmail.com

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