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Manage Budgets and Financial Plan Report

   

Added on  2020-04-07

6 Pages1144 Words42 Views
Running Head: Manage Budgets and Financial Plan1Project Report: Manage Budgets and Financial Plan

Manage Budgets and Financial Plan2Activity 1:Through the analysis, it has been found that the various changes have taken place into the efficiency of the company. The current efficiency position of the company is as follows:Average debtors dayReceivables/ Cost of sales*3653,62,500.00 8,00,000.00 165.39 (100000+1000000-300000) Average CreditorsdayPayables/ Purchase*36580,000.00 10,00,000.00 29.20 Stock turnover ratioaverage inventory / cost of goods sold *3652,00,000.00 8,00,000.00 91.25 (100000+30000)/2This efficiency position of the company depict that the average receivable days of the company has been enhanced and depict that the cash conversion cycle of the company has also been improved. Further, it has been found that the company must make a control over extra expenditure and fir reducing the level of the fixed cost per unit, company should enhance the production and sales as well (Borio, 2014). Company is also suggested to reduce the level of the cash conversion to enhance the operations and the production of the company. Further, it has also been found that the current position would also affect the financial position of the company (Gali, 2015). The ledger accounts balance of the company would be altered and thus the financial performance and theposition of the company have also been affected due to current changes. Activity 2: Cost analysisQ 1)A) Calculation of sales unit on the basis of desired profitSelling price $ 500 $ 40,00,000 Variable cost $ $

Manage Budgets and Financial Plan3250 20,00,000 Contribution (Sales - variable cost) $ 250 $ 20,00,000 Fixed cost $ 12,80,000 $ 12,80,000 BEP51202560000Desired Profit $ 10,00,000 Sales units to achieve the desired profit (Desired profit / contribution + sales units)9120 $ 45,60,000 W.N.Calculation of breakeven pointPer unitTotalSelling price $ 500 $ 40,00,000 Less:Variable cost $ 250 $ 20,00,000 Contribution (Sales - variable cost) $ 250 $ 20,00,000 Fixed cost $ 12,80,000Breakeven point (Fixed cost / contribution)5120 $ 25,60,000 Units(Brigham and Ehrhardt, 2013)Q 2)Calculation of variable costTotal sales $ 40,00,000

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