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LUBM303 : Business Analytic

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Added on  2021-04-06

LUBM303 : Business Analytic

   Added on 2021-04-06

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LUBM303 : Business Analytic_1
Table of ContentsIntroduction......................................................................................................................................1Question 1........................................................................................................................................1a)Mathematical model.............................................................................................................1b)Profit calculation...............................................................................................................1c)The costing behaviour for the projections............................................................................2Question 2........................................................................................................................................5a)Correlation coefficient of advertising/sales..........................................................................5b)Scatter Diagram of Advertising Expenditure and Sales Revenue.....................................6c)The impact of advertising expenditure on sales and how to gain a competitive advantagein the footwear industry...............................................................................................................7Question 3........................................................................................................................................9a)Break-Even Point and Margin of Safety Ratio.....................................................................9b)The estimated sales volume............................................................................................10c) Break-even chart for BAX Plc...........................................................................................10e) The benefits and limitations of the breakeven model and its application in marginal costing...................................................................................................................................................11Conclusion.....................................................................................................................................13References......................................................................................................................................14
LUBM303 : Business Analytic_2
IntroductionThe following report encompasses the use of business data for different analytical purposes fortaking important business decisions. Different kinds of data including accounting, statistical andfinancial data have been used for the three different organizations for answering question 1,questions 2 and question 3 respectively. The purpose of this report is to provide an analysis ofthe three company's operations and helping them to make the best decisions. Differentmathematical equations and graphical presentations have been used to interpret the businesssituations of these companies.Question 1a)Mathematical modelA mathematical model is a descriptive model of mathematical concepts where differentmathematical terms are used to describe something (Salado and Kannan, 2018). This process isknown as mathematical modelling. Mathematical models can be linear/ nonlinear, static/dynamic, explicit/ implicit, discrete/ continuous and so on. A mathematical model of the costinginformation of BF Ltd has been given below:y = mx + bUsing the slope-intercept form of a linear equation, with the total cost labelled TC (dependentvariable) and annual output labelled Q (independent variable):TC=VC*Q + FC (The total cost is equal to the variable cost per unit times the quantity producedplus the fixed cost)Here,TC = Total CostVC = Variable CostQ = Quantity of goods producedFC = Fixed Cost1
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b)Profit calculationTotal cost = TVC + TFC= 60000 + 40000= 100000TVC = VC per unit * Total output= 0.50 * 120000= 60000TR = 120000 * 1= 120000Profit = 120000 – 100000= 20000Here, TVC = Total Variable CostTFC = Total Fixed CostTR = Total Revenuec)The costing behaviour for the projectionsAssuming that the total variable cost will increase by 10% every year and both the sales quantityand price will enhance by 5%, a projection of the costs of Borehamwood Farms Limited (BFLtd) has been made below:Particulars202020212022202320242025TFC400004000040000400004000040000TVC600006600072600798608784696630.6TC100000106000112600119860127846136630.62
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