Financial Performance Management

Financial performance
management

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
QUESTION 1..................................................................................................................................1
(a) Calculation of per unit cost on the basis of labour hours.......................................................1
(b) Calculation per unit cost on basis of ABC method................................................................2
(c) Evaluation of results as per labour hours and ABC approach................................................4
QUESTION 2..................................................................................................................................6
QUESTION 3..................................................................................................................................8
Evaluation of neither ZBB nor the IB delivers the impeccable toll for preparation organisation
and control...................................................................................................................................8
CONCLUSION................................................................................................................................9

INTRODUCTION
Financial results analysis is a continuous real economy, which makes learning and
expansion at any level important. This is really a quantitative calculation, which each
organization carries out in an effective way to run its operations. Manager uses this definition in
order to predict economic expansion and organizational health for a certain span. There are
various ways to calculate and analyse financial performance. The quarterly earnings may begin
to be closer looked at and decreased successfully by investment analysts. This article focuses on
value accounting focused mostly on costing and accrual accounting framework. This research
involves the introduction of the estimation framework for management support and the
calculation of various material variances. There are also analyses of the issues about the new
system and variability in calculating efficiency. At the close of the study, ZBB and incremental
financial planning are discussed extensively.
QUESTION 1
(a) Calculation of per unit cost on the basis of labour hours
Total Overhead cost
Setup costs ..120000..
Receiving ..30000..
Despatch ..15000..
Machining ..65000..
..230000..
Overhead absorption rate:
Lip-stick Lip-balm Lip-gloss
Production Volume ..30000.. ..35000.. ..3000..
1

Labour hour per unit 3 2 2
total labour hours ..90000.. ..70000.. ..6000..
..166000
..
Total Overhead rate
230000. /
166000.. = 1.3855.
Cost per unit:
Lip-stick Lip-balm Lip-gloss
Sales ..22.. ..26.. ..24..
Raw material ...5... ...10... ..10..
Labour cost ..5.. ..5.. ..5..
Overheads rate ..4.16.. ..2.77.. ..2.77..
Cost ..14.16.. ..17.77.. ..17.77..
Profit per unit ..7.84.. ..8.23.. ..6.23..
Units ..30000.. ..35000.. ..3000..
Profit ..235301.20
..288012.0
5
..18686.75.
.
(b) Calculation per unit cost on basis of ABC method.
Cost
Driver
2