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FINANCE AND FUNDING INTRODUCTION

The aim of this unit is to help learners acquire knowledge, skills and techniques that will assist with management decision-making processes.

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Added on  2020-06-03

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FINANCE AND FUNDING INTRODUCTION 1 TASK 11 1.1 Importance of cost and volume in financial management: 1 1.2 Pricing methods used in travel and tourism sector:2 1.3 Factors influencing profit of tour and travels business: 4 TASK 25 2.1 Different management information methods used in tourism sector: 5 2.2 Management accounting information as a decision making tool: 7 TASK 39 3.1: Interpretation of financial accounts of restaurant group:9 10 TASK 412 4.1 Sources and distribution of funding: 12 CONCLUSION 13

FINANCE AND FUNDING INTRODUCTION

The aim of this unit is to help learners acquire knowledge, skills and techniques that will assist with management decision-making processes.

   Added on 2020-06-03

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FINANCE AND FUNDING
FINANCE AND FUNDING INTRODUCTION_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Importance of cost and volume in financial management:...................................................11.2 Pricing methods used in travel and tourism sector:..............................................................21.3 Factors influencing profit of tour and travels business:........................................................4TASK 2............................................................................................................................................52.1 Different management information used in tourism sector:.................................................52.2 Management accounting information as a decision making tool:.........................................7TASK 3............................................................................................................................................93.1: Interpretation of financial accounts of restaurant group:.....................................................9........................................................................................................................................................10TASK 4..........................................................................................................................................124.1 Sources and distribution of funding:...................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
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INTRODUCTIONFinance is the most imperative tool for the business survival. As, this requires to operatebusiness in an effective manner. Adequate finance are required to operate the business in aneffective manner and guide them to attain its predetermined targets. As the key objective is toattain the knowledge, skills and tools which will assist in taking efficient decisions regardinggrowth of the plan. The project advantages of cost, volume and revenue assist in making thebusiness decision making in the field of travel and tourism sector in appropriate manner to assessskills needed to realize financial data (Verstegen, 2011). Many of the project discuss aboutfinancial issues regarding with micro level and macro level in relation to travel and tourismsector. There are so many sources of funding available to travel and tourism sector which areexplained herewith. The finance department is looking for making the in depth research aboutthe financial system and concerned practices are required to be understood adequately. Entirebusiness decisions assist in making the business more successful and effective.TASK 11.1 Importance of cost and volume in financial management:In any organisation, cost are required to frame the most imperative role in enhancingprofitability of the cited firm. It is that kind of financial value that is washed-out in order togenerate any product or services but in case of tourism industry, cost which are covered at thetime of delivering services to its consumers and publicity of tourism sector. The cost is classifiedinto so many cost. These are categorised into so many cost. These are classified as follows: Indirect cost: These are required to be framed that are indirectly concerned with theproduction process. These are such as: material and labour cost. This is most imperativecost for the firm so as to forecast the additional cost and labour in providing customerservices so as to get the least losses.Direct cost: It is that kind of cost which are directly influencing manufacturing ofproducts and services (Theurillat, Corpataux and Crevoisier, 2010). Direct cost are themost assisting thing in operational planning as this will also assist in making adequatedecisions in terms of managing the cost system. 1
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Variable cost: These are the cost which changes as per the change in the additional unitin the production of units. As in Merlin entertainment plc is strongly concentrated onframing specific and unforgettable visitors experiences with its passion.Fixed cost: This is the cost which are stable or fixed irrespective of the change in theunits. Cost volume profit:This is one of the most imperative tool that render supportinginformation for administration in planning and build an effective decision making. Thetravel and tourism sector generate outcomes in order to make the business sustainable.Such as selling price and volume of sales, total fixed cost. CVP is a more particularassessment of the connection between selling price, total sales and profits. This plays animperative role by rendering adequate management information relating to financialneeds if a more specific level of activity does affect the selling price and other variables. 1.2 Pricing methods used in travel and tourism sector:There are so many factors those influence the pricing methods used in travel and tourismsector such as different locations, people, economy etc. these components diverse pricingstrategies of tourism business. Following are different methods that are used in taking decisionsof pricing in any tour and travel sector:Rack rates:This is a rate also known as “full rate”. It is a price, on which no discountsare applied previously and this is typically a rate that is provided to whole sellers. It isalso printed on the booklets as well (Gibson, Kaplanidou and Kang, 2012). These rate canalso vary according to the day. For example rack rates can be proved more expeditious onweekends in comparison to general days because people go for tours mostly on holidays.Seasonal pricing:As it is clear from name, it simply denotes a method of pricing inwhich profits can be made during those seasons which are on peak for tour and travelsbusiness and these profits will compensate the losses occurred when there was nodemand and there were low sales. It changes according to the demand of customers.While there is low demand the prices will also go slow to invite people.Cost plus method of pricing:This is a method in which the cost incurred in any goodsand services provided by company and other labour costs are included and then fixedpercentage of profits are to be added us in cost. After that the price that arises isdetermined as real value.2
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