Accounting for Business and Managers
Autor: simba • February 27, 2012 • Case Study • 1,630 Words (7 Pages) • 1,774 Views
Introduction
Business Solution Services
2008 2009
Units Units
4,500 Sales 1,890,000 6,500 Sales 2,535,000
Opening Stock 0 opening Stock 0
Production 1,080,000 Production 1,612,000
1,080,000 1,612,000
Contribution 810,000 Contribution 923,000
Fixed Overheads -360,000 Fixed Overheads -400,000
Net Profit 450,000 Net Profit 523,000
Management accounting is defined as ‘'the provision of information to people within an organisation to help them make better decisions and improve the efficiency and effectiveness s of existing operations.''
Task 1 (a)
(b) Break Even analysis
C/S = Total Contribution/Total Sales
2008
1,890,000/810,000= 2.3
Break even = fixed cost/contribution to sales
360,000/2.3 = 156,521
So to break even the company will need to sell 156,521
2009
2,535,000/923,000 = 2.7
Break even = fixed cost/contribution to sales
400,000/2.7 = 148,148
So to break even the company will need to sell 148, 148
(c)
The sales levels that would have to be attained in 2009 in order to generate a profit equal to what was earned in 2008, the business will have to sell 4,846 units.
(d)
Fixed overhead + desired profit
Contribution per unit
=360,000 + 950,000/180 = 7, 277
Task 2 (1a) Absorption Costing
March April
Sales 61,250 98,000
Opening Stock 0 11,250
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