Costing Methods and Cost Reduction Techniques for Dysonica Plc

Time constrained
project Business
Finance

Table of Contents
INTRODUCTION ..........................................................................................................................3
Task 1...............................................................................................................................................3
Determine the cost of Dysonica according to their nature..........................................................3
TASK 2............................................................................................................................................7
Provide Recommendation & Method of Cost Reductions..........................................................7
TASK 3..........................................................................................................................................10
Preparation of a budget forecast of 12 moths for organisation up to 30 April 2023.................10
TASK 4..........................................................................................................................................14
Analysing the performance of Dysonica with the help of Forecasted budget.........................14
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
This report basically discuss about the two terms that is finance and credit these terms are come
from the concept business finance. The firm's financial base is very important. Basically this is
necessary to combine assets, goods and services and raw materials also with another economic
projected activities. In general, the money invested by the businessman into the business to start
the business is not enough to satisfy the organization's financial necessities. On the basis of
above performance, the proprietor must look for a direction to create sales revenue. A brief
examining the financial needs and expectations for gathering those requirements must be
executed for the purpose of showing accomplishment of better financial management in order to
maintain the stability of the business. This case is mainly discuss about the company Dysonica
Plc. This report is categorized into four sections. First task is describe about the separate cost of
the company and how the firm discriminate these costs into sections such as fixed cost, variable
cost and semi-variable cost(Baker and Nofsinger, 2012). It also explain about the case of
marginal, absorption and activity-based costing. In task two it also discuss about the various of
suggestions to the company in the case and how they can decline the cost and maintain the
efficiency of the project. In third task it describe about the predicted cash flow of the company
for the past 12 months up to 30th April 2023 of the Dysonica Plc. In last task it provides a
performance measurement of the company and how the business is operative in the industry with
the assist of these predicted figures in the cash flow it estimate the cash Flow Dysonica plc (Wu
and Wang, 2000).
Task 1
Determine the cost of Dysonica according to their nature
Cost: The term cost refers to expenditure on manufacturing and supplying of products and
services. In simple words, the cost arises when any type of production or selling activity takes
place. On behalf of cost accounting, the term is used as a form of managerial accounting that
main intent is to acquire a company's total cost of creation or production by analysing its variable
cost and fixed cost. Variable and fixed costs are expenses incurred during the company's
production (Bozec, 2005). These expenses are as follows:
Variable cost: The cost which is depending on company production and sales is known as
a variable cost. Variable cost fluctuation takes place when any type of change occurs in the

company during the formation and sales of its goods and services. In other words, variable cost is
increased or decreased in proportion to company creation and trade. Variable costs are calculated
by adding all marginal costs over the total number of units produced. It includes Raw material, a
charge of delivery and packaging and labour.
Fixed Cost: The cost which never fluctuates neither in increase nor in the decrease of
products and services is called fixed cost. Fixed cost are independent cost which do not depend
upon any production or sales of the company. Therefore, fixed cost are considered to be indirect
costs. Such costs are insurance and utility bill payment, rent payment and employees salaries.
Semi – variable costs: Semi variable cost are generated from the combination of two
costs, variable cost and fixed cost. It is also known as semi – fixed costs or a mixed cost. This
cost are fixed at a particular level of production or utilization, and turn into a variable cost after
level of production is exceeded (Brinn, Jones and Pendlebury, 2001).
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
Unit costing is the method which is used to determine the total number of expenditure
incurred by an organization to manufacture, preserve and sell per unit of a individual goods or
services. It is also named as “output” or single “output”.This costing manufacture a individual or
single product on huge altitude on a regular basis. The units of all individual are same in respects
of size, quality and shape. Process costing is the activity where products are not produce on a
continuous basis.