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Finance in funding in travel and tourism sector - Assignment

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Added on  2020-10-22

Finance in funding in travel and tourism sector - Assignment

   Added on 2020-10-22

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Finance in funding in traveland tourism sector
Finance in funding in travel and tourism sector - Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1 ...........................................................................................................................................11.1 Concept of CVP analysis and its importance in financial management ..........................11.2 Analysis of pricing methods.............................................................................................31.3 Factors influence on profits .............................................................................................4D 1 Viability of holiday trip ..................................................................................................5TASK 2............................................................................................................................................52.1 Different types of management accounting information..................................................52.2 Use of investment appraisal techniques ..........................................................................6TASK 3 ...........................................................................................................................................93.1 Interpret ratios for profitability, liquidity and investment ...............................................9TASK 4..........................................................................................................................................124.1 Sources and distribution of funding ..............................................................................12CONCLUSION .............................................................................................................................14REFERENCES .............................................................................................................................15APPENDIX ...................................................................................................................................16
Finance in funding in travel and tourism sector - Assignment_2
INTRODUCTIONFinance is area that is involved with the investment of assets and liabilities over spaceand time frequently under situation of risk and doubt. On the other hand, funding is the action ofgiving financial resources normally in kind of money or other values such as exertion or time tofinance needs by firm (Beck and Yang, 2015). In this context, finance and funding is essentialpart of travel and tourism sector for planning trips and earning profits. This study is based onEUROCARIB TOUR. It is major London based European tour operators. This tour operator isplanning summer holiday trip to Caribbean holiday Resort. This report will examine concept ofCVP analysis and its importance in financial management. It will analysis of pricing method anddifferent factors influence profits earn on holiday trips. Furthermore, report will explain differenttypes of management accounting information and use of investment appraisal techniques asdecision making tools. TASK 1 1.1 Concept of CVP analysis and its importance in financial management Cost Volume Profits Analysis(CVP): Cost volume profits analysis is planning procedures that administration utilizes toanticipate future volume of action, costs obtained and received profits. The CVP analysiscategorizes all costs as either fixed and variable. Fixed costs are expenditures that do not displacewith producing the volume of units. On the other side, variable costs alteration with manufacturelevel (Odden and Picus, 2018). This analysis utilizes two costs to strategy out level of productionand associated with level of income. As production levels enhance, smaller percentage of totalincome is fixed costs while remain constant percentage that is variable costs. Cost controller andadministration if organization investigate these trends in an attempt to anticipate future costs,sales and profits of company. The CVP analysis are also adopted by travel and tourism sector such as EUROCARIB.There are various elements in this analysis that are level of volume of actions, selling prices ofunit, variable cost per unit, total fixed cost and direct as well as indirect cost of workforce inorganization. There is formula for CVP analysis that is derived from profits equation such as:px= vx+FC+Profit Where, p is price per unit 1
Finance in funding in travel and tourism sector - Assignment_3
v is variable cost per unit x are total numbers of unit produced and soldFC is total fixed cost For calculating price using CVP, addition of profits, fixed cost and variable cost of totalnumber of produce and sold units. With the help of it, EUROCARIB identify price for salesvolume and costs of products. With the help of it, determine cost at different level of activity byfixed budget (Bergset, 2018). CVP analysis aids in assessment and control of execution forprofits of company. Firm utilize this for calculating break even point in sales and procedures ofproduction. This analysis covers all costs associated with revenue of organization. Importance of Cost Volume Profits Analysis (CVP): The cost volume profits analysis is very essential to determine interrelation of factors thataffected on profits of EUROCARIB. The interrelationship between cost volume and profitscreate structure of profits of the organization. It is important to identify the fixed and variable cost of total number of produced and soldunit of products. With the help of it, chosen tour operator can determine costs and sales for planning thedifferent trips. CVP analysis is important to identify and control all the fixed and variable cost ofproducts and services of the company (Rajé, 2017).It is essential to predict and analyse the significance of its short run decisions about fixedcosts, marginal costs, volume of sales and selling price for plans of profits in which CVPplays an important role. ParticularsFigures (in £)Fixed cost120000Desired profit margin30000Selling price per unit1600Variable cost per unit400Contribution1200Number of tourists need to be served for(120000 + 30000) / 12002
Finance in funding in travel and tourism sector - Assignment_4

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