Analysation of Changing Factors in Respect of Profitability
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Added on 2020-06-05
Analysation of Changing Factors in Respect of Profitability
Added on 2020-06-05
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1SITUATION 2.................................................................................................................................1(A) Analysation of changing factors in respect of profitability..................................................1(B) Should the factors should be considered ?............................................................................3CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
INTRODUCTIONManagement amounting is a system provides a format of storing the financial andaccounting information in legal and systematic manner. Analysation of project plans and findbest options by forecasting of plans are also one of the essential work of management accounting(Meaning of management accounting, 2017). Basically forecasting is the part of decision makingprocess and management accounting also plays vital role in forecasting method. As per abovescenario The Flying airline wants to restructure its operations because of some challengingsituations. SITUATION 2(A) Analysation of changing factors in respect of profitabilityJenna Elfman who is the manager of The Flying Airline company, wants to adapt newoperation structure with its existing structure. As per current situation company is operatingflights from Sydney to Hawaii. Now the managers want to change the structures of operationsand wants to make a stoppage in Fiji to earn extra profits. As per managers the new route wouldbe able to attract new passengers and would help to generate extra income. Variable factors affect the net profitability (Kucukvar and et. al., 2014). There are somevariable cost changes found in adopting new structure which are creating challenging situationfor management. Below are some analysis done to bifurcate the existing structure and newstructure of company. Evaluation of profit with the existing structure of The flying AirlineParticularsAmount($)RevenuesPassenger revenue240000Cargo revenue80000Total Revenue320000Less: expenses and costFlight crew cost-2000Fuel-21000Meals and services-4000Aircraft maintenance-1000Net profit292000Evaluation of profit as per changing structureParticularsAmount($)Revenues1
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