Business Finance: Cost Reduction Strategies and 12-Month Budget Forecast for Dysonica Plc

FINANCE

Table of Contents
INTRODUCTION.......................................................................................................................3
TASK 1.....................................................................................................................................3
Establish the purpose of cost...........................................................................................................3
TASK 2.....................................................................................................................................7
Render the recommendations towards the business for the cost reduction policies and strategies.. 7
TASK 3.....................................................................................................................................8
Develop a 12-month budget/forecast the business activities up to 30th April 2023............................8
TASK 4...................................................................................................................................11
With the help of figures and facts in the budgets and forecast, examine and analyse the
presentation of Dysonica Plc..........................................................................................................11
CONCLUSION.........................................................................................................................12
REFERENCES..........................................................................................................................13

INTRODUCTION
The report prepared as under explains the quantity of amount, managed and arranged by the
business enterprises for the purpose to fulfil the demands and expectations of the firm in long
run. It can also be explained as the funds which are being utilised by the companies or businesses
for running a business in competitive environment. These funds would include the credit funds
and capital funds which are being invested in a industry. The enterprise further would be utilising
these funds in acquiring the assets, purchasing of raw materials and producing a good and other
operational function considering activities. When the business would be starting its firm after
that the capital being introduced is not enough for meeting and reaching each and every desire
related to business (Aldridge and Avellaneda, 2021). Hence, in relation to fulfil such needs,
business companies would be looking after so many mechanisms for generating revenues and
profits. The evaluation of possibilities and financial requirements and possibilities could be cross
checked on a daily basis such that the good financial management plan could be created,
developed and prepared for smoother functioning of a business. This report takes in account case
study based on Dysonica Plc. It consists of four operational activities where the first task would
be considering the expense related areas. And segments of a firm and in what ways it would be
differentiating among them. The second task would be highlighting the recommendations for the
management which would help the managers in reducing the expenses and cost as well. The third
task consists the projection and estimation of cash flow of Dysonica Plc till April 30, 2023. And
the last task states in what ways accomplishment and achievements can be examined of an
organisation and in what ways a specific industry is being observed to perform. This judgement
would be taking place in relation with forecasted values in the cash flow of Dysonica Plc.
TASK 1
Establish the purpose of cost.
Cost can be explained as a term which is helpful in supplying and manufacturing of
commodities and services. In production cycle, cost can explain as a very essential element at
every level from acquisition of raw materials to finished products of a company. Generally the
cost is stated as a amount of fund which is helpful in covering expenses related towards
production being carried out. There are various sort of costs which would be affecting the

business but usually two type of expenses which make complexity in production of goods can be
explained as fixed and variable cost.
Variable cost: It can be explained as a cost which refers to expense which is directly dependent
on organisation production and sale related activities and which would be measuring the cost per
unit which is sold on additional basis. If the production and supply of commodities in a company
decreases or increases then the variable cost is also observed to rise or decline respectively which
denotes that they both seem to be parallel with each other. Variable cost can be explained
Semi variable cost: The expenses which is being paid at regular time intervals is based on yearly,
quarterly or monthly for examining the needs of the business. It generally includes both the costs
fixed and variable. Semi variable costs are depreciation of fixed asset, staffing and facility rent.
Fixed cost: Fixed expense is a cost which is always similar even when there is any fluctuation in
production and selling of goods and services. It is an independent cost that quantity won’t affect
from any of the decrease or increase in the cost of product or services. It would be including the
rent payment, insurance, salary payments and bill payments (Bals, 2019).
Fixed
Costs
£ Variable
Costs
£ Semi-variable
Costs
£
Machinery 1500 Raw materials 15000 Office and
sales staff
9000
Factory
and
storage
rent
18000 Direct labour 17500 Logistics 3000
Utilities 500
Insurance 500
Total: 20500 32500 12000
The expense which would manufacture the same good or commodity on a continuous
basis over a larger volume can be explained as unit cost. The cost which is being referred to
single unit of manufacturing good or product. It is also known as cost of products being sold and