Accounting for Managers in Bonza Handtools
Added on 2020-05-28
12 Pages1693 Words95 Views
Running head: ACCOUNTING FOR MANAGERS Accounting for managersName of the studentName of the universityAuthor note
1ACCOUNTING FOR MANAGERSTable of ContentsQuestion 1..................................................................................................................................2Question 2..................................................................................................................................4Question 3..................................................................................................................................5Question 4..................................................................................................................................7Reference....................................................................................................................................9
2ACCOUNTING FOR MANAGERSQuestion 1Proposal 1- view of Jan RossiParticulars AmountSales $ 2,800,000.00 Less: CostsVariable cost $ 1,000,000.00 Fixed cost $ 400,000.00 Fixed selling and administrative cost $ 425,000.00 Variable selling and administrative costs $ 600,000.00 Total costs $ 2,425,000.00 Profit $ 375,000.00 It can be identified from the above calculation that the profit of Bonza Handtools cango up to the amount of $ 375,000 that is increase by 25%. Further, if the advertising cost isincreased it will increase the financial burden on the company (Horngren, Datar and Rajan2012). As per Jan Rossi, sales can go up by 8% approximately as compared to the last year ifthe advertising cost as well as the selling price is increased.Proposal 2 – view of Tom TuneParticulars AmountSales $ 3,250,000.00 Less: CostsVariable cost $ 1,375,000.00 Fixed cost $ 400,000.00 Fixed selling and administrative cost $ 300,000.00 Variable selling and administrative costs $ 750,000.00 Advertising cost $ 50,000.00 Total costs $ 2,875,000.00 Profit $ 375,000.00 As per the view of Tom Tune, the company can increase their sales by 25% if theselling price is maintained at same price that is $ 130. However, it is found from the abovecalculation that improving the quality of the product may generate higher level of sales but
3ACCOUNTING FOR MANAGERSthe profit will not be more than the proposal of Jan Rossi. In fact the profit will be at the samelevel. On the contrary, if the advertising cost and per unit cost for variable manufacturing isincreased, the profit can go up by $ 75,000. Proposal 3 – View of Mary WatsonParticulars For 1st 3 monthsFor rest of the time Sales $ 1,200,000.00 $ 1,820,000.00 Less: CostsVariable cost $ 500,000.00 $ 700,000.00 Fixed selling and administrative cost $ 300,000.00 Variable selling and administrative costs $ 300,000.00 $ 420,000.00 Fixed manufacturing cost $ 400,000.00 Total costs $ 1,500,000.00 $ 1,120,000.00 Profit $ (300,000.00) $ 700,000.00 Total profit $ 400,000.00 As per the proposal of Mary Watson the company can increase the profit by 33% andit can increase sales for the rest 9 months by $ 182,000. Thus, among the all 3 proposals,promotional campaign is beneficial for Bonza Handtools.
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Managerial Accounting in Business Assignmentlg...
|9
|1507
|86
Accounting For Managers - Bonza Handtools ltdlg...
|6
|1235
|40
Accounting for Managers: Bonza Handtools, Tassie Company, ABC Limitedlg...
|17
|3306
|366
Accounting for Managers Assignment | Accounting Assignmentlg...
|13
|2125
|146
Power Drill Case Study : Bonza Handtools Ltdlg...
|8
|2391
|280
Accounting Assignment | Accounting for Managerslg...
|14
|2752
|61