Accounting and Finance: A Study Report

Accounting and Finance
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Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
PART 2............................................................................................................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Accounting and finance are major aspect within business environment. Accounting relates to
systematically recording all fiscal and related events in books to assess the aggregate financial
performance. While finance is related to arranging funds and support business managers
decisions with aim to boost business performance. Organisation should control overall tasks of
accounting and finance which enable managers to achieve organisational goals and tasks
(Loughran and McDonald, 2016). The study report covers preparation of systematic profit and
losses statements which shows profit of each division, separating external sales and inter-
divisional transfers. Further it covers evaluation of case study related to regulations emphasized
on controlling of systemic risks by capital controls.
PART 1
(a). Three-page PowerPoint presentation:
Covered in PPT:(b). Report:
 Additional Gain in case capacity increase from 40000000 to 50000000:
 Contribution from Retail Sale:
= (Selling Price – Variable costs) * Number of units
= (0.13 - .04) 10000000
= 900000
 Thus, by spending $ 500000 in to new machine division can enhance its profit by $
900000. In case of transfer price policy shift from cots + 20% marking up to opportunity
cost. New price would be:
Variable Costs .04
Benefit to be lost .09
Total Cost .13
Old transfer price is [.12 (0.4 +.06) + 20%]
Revised Profit Statement:
Division 1 Division 2
Sales to Retailer 3900000
(30000000*.13)
10000000
(20000000*.5)
Sales to Division 2600000
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