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Finance and Funding in the Travel and Tourism Sector Assignment (Doc)

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Added on  2020-10-05

Finance and Funding in the Travel and Tourism Sector Assignment (Doc)

   Added on 2020-10-05

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Finance and Funding in theTravel and Tourism Sector
Finance and Funding in the Travel and Tourism Sector Assignment (Doc)_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1 ...........................................................................................................................................11.1 Concept of CVP analysis and its importance .......................................................................11.2 Different pricing methods.....................................................................................................21.3 Factors influences on profits ................................................................................................3TASK 2............................................................................................................................................42.1 Different types of management accounting system .............................................................42.2 Use of investment appraisal techniques ...............................................................................5TASK 3............................................................................................................................................73.1 Financial statement using appropriate ratio .........................................................................7TASK 4 ...........................................................................................................................................84.1 Sources and distribution of funding .....................................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
Finance and Funding in the Travel and Tourism Sector Assignment (Doc)_2
INTRODUCTIONFinance is amount of total of money given to company with expectation to repay as wellas firms are liable to pay back amount along with particular percentage of interest. It is procedureof acquiring money for business purpose and it is given by financial organisation like banks,leading agencies etc. On the other hand, funding is activity of giving fiscal resources usually inkind of money and project by entity (Brett, 2014). There are many sources of funding that needsby company such as government funds in form of donations etc. This study is based onEUROCARIB TOURS. It is major London-based European tour operators that focusing onCaribbean holidays. Tour operator is planning summer holidays trip to Caribbean HolidayResort. This report will examine concept of CVP analysis and its importance in financialmanagement. It will analysis of pricing methods and different factors that influences on profits ofthe business. TASK 1 1.1 Concept of CVP analysis and its importance Cost Volume Profits Analysis(CVP): CVP is planning procedure that director utilize to anticipate future volume of action, costincurred, sales made and receiving profits. This analysis categorizes all costs as either fixed orvariable. In this context, fixed costs are expenditures that don't move directly with volume ofproduced units. On other side, variable cost is changing with level of production. These costsinvolve material and labour that go into producing every unit. This analysis utilizes two costs totract out level of production and income is connected with every level. If level of production israised, smaller percent of total income if fixed costs while remain constant percentage is variablecost. In additions to that, there are many elements of analysis of CVP such as volume ofactivity, selling prices of units, variable cost per unit, total fixed costs, direct and indirect costworkforce. The objectives of CVP analysis is calculate profits fairly and correctly as it isimportant to know relations among the cost and profits (Jan, 2013). This analysis helpful insetting up flexible budget that shows costs at different level of actions. It is needed to budget thevolume first for setting budget for sales and variable costs. 1
Finance and Funding in the Travel and Tourism Sector Assignment (Doc)_3
CVP is the management accounting methods that is involved with effect of sales volumeand product cost on operation profits of company. There is basic formula that utilized in CVPanalysis such as:px=vx+FC+Profit Where p= Price per unit v= Variable cost per unit x= Total number of unit produced and sold FC= Total fixed cost Importance of CVP analysis:CVP analysis is essential to management as it give perception into effects and inter-relationship of elements that effect profits of organization. The relation among cost, volume andprofits creates structure of profitability of company. CVP analysis is important to anticipate andmeasure significance of its short run decisions regarding fixed, marginal cost, sales volume andselling price for its profits plan on constant basis. It is important in many ways such as:It is essential to determine constant and variable cost. This means it creates premisesabout those conditions.CVP is important to find the most profitable collection of costs and volume. It is crucial to inform decisions about selling of product and services of company. It gives overview of planning process of profits of company. Break-even Analysis: Break even analysis estates the calculation and determination of margin of safety for anorganization based on revenue gathered and joint costs(Break-even Analysis, 2018). The basicformula for calculation break-even analysis that is Total fixed cost/unit contribution margin. Thefixed cost of trip is £120000 and contribution is £1200. So that, the Break even analysis is the£100.2
Finance and Funding in the Travel and Tourism Sector Assignment (Doc)_4

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