Accounting Information System and Decision
Added on 2020-06-03
12 Pages2205 Words69 Views
ACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1Question 1: Financial suggestions to the senior staff..................................................................1Question 2: Opinion on level of the bid......................................................................................4Question 3 Salaries and depreciation considered as assets in the balance sheet.........................5Question 4...................................................................................................................................6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
Illustration IndexIllustration 1: Comparison of profits................................................................................................4Index of TablesTable 1: Actual profits in previous year..........................................................................................1Table 2: Estimated profits from Proposal 1.....................................................................................1Table 3: Estimated profits from Proposal 2.....................................................................................2Table 4: Estimated profits from Proposal 3.....................................................................................2Table 5: Profits for Tassie Company...............................................................................................4Table 6: Profits from Case 1............................................................................................................4Table 7: Profits from Case 2............................................................................................................5Table 8: Overhead Allocation Rate..................................................................................................6Table 9: Total Cost of Special order................................................................................................6Table 10: Total cost with Machine Hours........................................................................................6Table 11: Minimum Price per Trailer..............................................................................................7
INTRODUCTIONAccounting is a systematic and comprehensive way to record the transactions whichhelps to analyse, interpret and compare data which further, contributes in decision making(Romney, & Steinbart, 2012). The report discusses various cases through which effect on profitscan be analysed by the entity. Further, it focusses on considering salaries and depreciation asassets of the enterprise. In the end, it ponders on allocation rates, total cost of the order andminimum price per trailer for ABC Ltd. Question 1: Financial suggestions to the senior staffTable 1: Actual profits in previous yearParticularsPer unit cost ($)Total costSales (20000 units)1302600000Less: Variable manufacturing cost501000000Less: Variable selling and administration cost30600000Contribution501000000Less: Fixed manufacturing cost400000Less: Fixed selling and admin cost300000Profits300000In order to increase profitability, the accountant, Jan Rossi have suggested to increaseprice by $10. She has also recommended t increase the expenditure on national advertisement by$125000. The changes proposed will have following effects on the profits: Proposal 1Table 2: Estimated profits from Proposal 1ParticularsPer unit cost ($)Total costSales (20000 units)1402800000Less: Variable manufacturing cost501000000Less: Variable selling and administration cost30600000Contribution601200000Less: Fixed manufacturing cost400000Less: Fixed selling and admin cost3000001
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