Project Report: Financial Management Assignment

Added on - 28 May 2020

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Running Head: Financial Management1Project Report:Financial Management
Financial Management2Executive SummaryThis report has been prepared over 2 cases of activity based costing and budgeting.Activity based costing case explains about the US bright product company which producescakes and pastries. This case explains about the total cost per cake and the production cost ofthe company. Activity based costing method has been used to solve this case. In first section,cost per unit has been calculated through dividing the total cost according to the cost drivers.Further, bill of activities have been prepared and lastly, product cost for lamington and detailabout extra cost have been given.In this case, Hawthorn Leisure Works is preparing a plan to enhance the cash inflowsof the company through making few changes in the membership plans and fess structure ofthe company. This case explains that the budgeting is the main part to evaluate theperformance of the plan in near future.
Financial Management3ContentsPart A: Activity Based costing.........................................................................................4Introduction...................................................................................................................4Cost per unit of the company........................................................................................4Bill of activities.............................................................................................................6Product cost for lamington............................................................................................7Conclusion....................................................................................................................7Part B: Budgeting.............................................................................................................9Introduction...................................................................................................................9Improvement in the fee structure................................................................................10Assumptions...............................................................................................................11Evaluation...................................................................................................................12Conclusion..................................................................................................................12References.......................................................................................................................13
Financial Management4Part A: Activity Based costingIntroduction:Activity based costing is the costing method which assists the management of thecompanies to evaluate the activities which a company performs and then assigns the indirectcost to each product accordingly. This case explains about the US bright product companywhich produces cakes and pastries1. This case explains about the total cost per cake and theproduction cost of the company. Activity based costing method has been used to solve thiscase. In first section, cost per unit has been calculated through dividing the total costaccording to the cost drivers. Further, bill of activities have been prepared and lastly, productcost for lamington and detail about extra cost have been given.Cost per unit of the company:In this section of the case, cost per unit has been calculated through dividing the totalcost according to the cost drivers. Following is the calculations of the total cost per unit of thecompany:Calculations of Activity Based CostingActivityActivitycostActivity driverAnnualquantityCost perunitPrepare annual cost$5,000Process receivable$15,000No of invoices$5,000$3.00Process Payable$25,000No of purchase orders$2,500$10.00Program Production$28,000No of productionschedules$1,000$28.00Process sales order$40,000No of sales orders$4,000$10.00Dispatch sales order$30,000No of dispatches2$2,500$12.00Develop and test$Assigned directly to1Robin, Cooper.Supply chain development for the lean enterprise: interorganizational costmanagement. Routledge, (2017).
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