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Finance Purpose and Its Role in Decision-making : Report

   

Added on  2020-06-04

12 Pages2295 Words29 Views
Finance and Funding in theTravel and Tourism Sector

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1 Cost Importance....................................................................................................................31.2 Analyse of pricing methods used in travel and tourism sector.............................................41.3 Analysis of different factors which influence profitability of travel and tourism ................5TASK 2............................................................................................................................................6Covered in PPT...........................................................................................................................6TASK 3............................................................................................................................................63.1 Interprate financial statement................................................................................................6........................................................................................................................................................10TASK 4..........................................................................................................................................114.1 Covered in Leaflet...............................................................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12

INTRODUCTIONFinance is one of the paramount component which is importance for functioning variousbusiness activities. A company can render effective and better services for their consumer butthis is require to balance their financial resources of enterprise cause in case if failing ion propermanagement, the firm may have to face various problems and issues (John and Susan, 2015).Sector of travel and tourism have seen rapid and drastic growth in last few decade. In absence ofproper funds and monetary resources, individual would not be able to satiate their desires andlongings. The major aims of their report is to analyse the finance purpose and its role in decision-making to meet objectives. This will also evaluate financial decision for making effectivejudgements. TASK 11.1 Cost ImportanceCost is the main elements which aid to identify the organisational benefits. However,there are several cost which are utilised by organisation for analysing the business objectives andissues in meeting them. Without management of cost, Carnival Plc. can not handle their services,However this is essential for delivering consumer services in regard of dealing and promotionrelated with other resources. There are mentioned some sort of cost which is mentioned here: Direct costs: this is the cost which directly relates to the production of goods. However,this is the costs which directly add costs to the company’ products. There are some of the factorswhich are covered in the direct costs. These are direct material, direct labour and the directoverheads. Hover, there is a strong need to make certain tools in order to evaluate the costs of theproducts. After adding the direct cost in the product, prime cost is calculated.Indirect costs: This is the costs which does not connect directly to the cost of the product.Although, there is a strong need to know calculate the cost of the product (Koutra and Edwards,2012). Various overheads which are indirectly related to the product cost are considered underthis. Factory overheads and other administrative overheads are covered under this.Variable cost: this is the cost which changes according to the change in the production.This vary with the change in the production3

Fixed Cost: This is fixed rate which does not change even after the decrease in output.Rent paid through Carnival Plc is an fixed cost example. Weather they render service to shrinkoperations dan people, this cost dopes not fluctuate. Apportionment and Allocation: The expenses which are overhead not linked with anymaterial and direct labour or worker. There are several techniques and approaches of costallocation such as absorption and marginal costing. Break Even Evolutional: This financial administration tool concentrate over the outcomeof determined unit amount that should be traded by the company (Ma and Hassink, 2014). This ispoint of making benefits and covering the expenses which can be organised quarterly, monthlyand yearly. Scale Economies: When a company gain their output, the product expenses decreasecause of several elements such as fixed cost of allocation. This respected concept is also popularas the scale economies. The major cause behind the Carnival Corporation Plc achievement isfocused over outcome in enhancing entire cost. Scale Diseconomies: This concept is linked with the marginal cost after the increment inoutput. For e.g. if there are more than 2 operation engaged in the whole trip, the organisationdecrease he one activity speed then they also make the process with more pace. 1.2 Analyse of pricing methods used in travel and tourism sectorDetermining the effective cost is complex task for several organisation. There are time,when Carnival Corporation Plc, when company felt the imbalance in the costing managementstrategies cause of feeling some losses. Through opting these methods costing, the company canmeet revenues: Cost-led Pricing: It is one of traditional method in which initially they make the net costof produced units and then expected benefits is added for meeting the final cost of products(Morrison, 2013). The Carnival Corporation Plc is utilising the same techniques for evaluatingthe price in cruise for ascertaining the cost they has to make from clients. Price-led Costing: Nowadays, enterprise consider the strategy of purchasing the productsof consume. Service rates is determined through analysing the amount that consumer areprepared to pay. Carnival Corporation's clients are willing to make the investment of their capitalwillingly as the company has goof positioning in the market. The company first target to clientsand their buying power and then make the changes according to this. 4

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