Accounting for Decision Making

This document discusses the assessment of the sales and marketing department and the use of cost-volume-profit analysis in decision making.

Running head: ACCOUNTING FOR DECISION MAKING
Accounting for Decision Making
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1ACCOUNTING FOR DECISION MAKING
Table of Contents
Sales and Marketing Department Assessment:................................................................................2
Task 3:.........................................................................................................................................2
Task 4:.........................................................................................................................................3
References:......................................................................................................................................5

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Sales and Marketing Department Assessment:
Task 3:
Based on the provided analysis, it could be identified that $14,800 is allotted for the extra
promotional activities. Hence, the above items are chosen in suitable volumes for performing the
promotional activities within the stipulated amount. The main reason of choosing quarter page
strip is to enable the readers in having their eyes focused on one sentence so that visual field
could be controlled effectively (Brewer, Garrison & Noreen, 2015). Increased returns could be
earned on marketing investments by the management of Crystal Hotel through the usage of
digital foyers. The bus shelter posters would assist the hotel in identification of bench

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advertisements at the street level that makes it suitable for advertising to drivers and pedestrians
in urban places.
The brand presence of Crystal Hotel could be enhanced by using digital billboard and
there would be generation of consumer awareness through their experience. Printed advertising,
on the other hand, would raise the overall customer exposure frequency, ensure effective visual
effects and develop firm reputation along with brand image (Langfield-Smith et al, 2017). Lastly,
the reason to select the two-sided A6 flyers would help the hotel to save more on advertising
budget due to low expenses associated with the same.
Task 4:
With the help of cost-volume-profit (CVP) analysis, it becomes possible to ascertain the
alterations in cost and volume on operating profit and net profit of a firm. Moreover, the
management could utilise this analysis for making decisions when it comes to formulation of

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prices in order to ensure the generation of considerable amount of profit for the organisation. In
the current era, majority of the global business organisations as well as accounting professionals
are involved in utilising the CVP analysis so that they could make sound decisions regarding the
services provided or products sold (Mishan, 2015). In this regard, it is noteworthy to denote that
the role of the CVP analysis is significant in managerial accounting when contrasted with
financial accounting. In order to carry out this analysis for decision making purpose,
consideration of a number of assumptions has been made and they are summed up as follows:
 Easy separation of costs into variable costs and fixed costs could be made from the
overhead, administrative and manufacturing expenses in CVP analysis.
 The sale price each unit does not change regardless of unit volume.
 The only factor that seems to have impact on cost includes the alterations in activities.
 The amount of production is assumed to be equivalent to the volume of sales
(Navaneetha et al., 2017).
In case of Crystal Hotel, CVP analysis is crucial because it is essential to have an estimate of
the sales level in order to reach the break-even point for avoiding any kind of loss. By using this
analysis, the management could anticipate sales revenue, which it could be able to obtain over
the forecasted periods. Moreover, the analysis is highly valuable in the phase of hotel planning in
order to estimate the range of services that the management would provide to reach the break-
even point.

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References:
Brewer, P. C., Garrison, R. H., & Noreen, E. W. (2015). Introduction to managerial accounting.
McGraw-Hill Education.
Langfield-Smith, K., Smith, D., Andon, P., Hilton, R., & Thorne, H. (2017). Management
accounting: Information for creating and managing value. McGraw-Hill Education
Australia.
Mishan, E. J. (2015). Elements of Cost-Benefit Analysis (Routledge Revivals). Routledge.
Navaneetha, B., Punitha, K., Rashmi, M. J., & Aishwariyaa, T. S. (2017). An analysis of cost
volume profit of Nestlé limited. International Journal of Commerce and Management
Research, 3, 66-68.