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Report On The Carib Happy Tours Company - Importance Of CVP Analysis

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Added on  2020-02-05

Report On The Carib Happy Tours Company - Importance Of CVP Analysis

   Added on 2020-02-05

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Finance and Funding inthe Travel and TourismSector1
Report On The Carib Happy Tours Company - Importance Of CVP Analysis_1
TABLE OF CONTENTSINTRODUCTION ..........................................................................................................................3TASK 1............................................................................................................................................3A...................................................................................................................................................3B...................................................................................................................................................4C...................................................................................................................................................5Task 2...............................................................................................................................................6A...................................................................................................................................................6B...................................................................................................................................................8Task 3...............................................................................................................................................9A...................................................................................................................................................9task 4..............................................................................................................................................12A.................................................................................................................................................12Conclusion ....................................................................................................................................13REFERENCES .............................................................................................................................142
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INTRODUCTION The management of large amount of money by the companies and governments isknown as the finance. While funding is the act of providing a financial resources in the form ofmoney to the organization for starting a business or any other reason. The present report is basedon The Carib Happy tours company which provide a summer holiday package to its customer.The firm also provide a hotel at resort to accommodate its tourist. The present report covers, theimportance of CVP analysis at the travel and tourism business is explained. Along with this,pricing method that CHTC use to determine the price charge by tourist is analyzed. Apart formthis sources and distribution of fund for the development of capital projects associated withtourism is analyzed. TASK 1A.According to the given scenario The Carib happy tours company (CHTC) is planning asummer holiday trip at the Caribbean holiday resort. The company the book the hotel at theresort for comfort its tourist. It analysis the cost volume profit for knowing the profit by using theconcept of CVP analysis that are as follow:The cost volume profit analysis is known as a (CVP) it is a tool of planing a profit of theCHTC. Further it helps to manager in understanding the change in the firm profit which arisesdue to the change in the firm variable cost, selling price, volume fixed cost and the mix of theproduct sold (Hu, Liu, and Zhou, 2012). Moreover, the CVP analysis helps in knowing theinteraction and relationship between the different products selling price, any change in variablecost per unit, the tour company make or achieve all the sale volume and the sale mix that is thevarious product which company produce for selling purpose. Basic elements of CVP analysis are as follow:Cost: Cost is the first element of business. CHTC incurs certain cost initially for carrying out thebusiness. These cost are used for making a a product and for providing a services so, it is aexpanses 3
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Volume: Volume is the second important element of the business which is how much the tourcompany will produce and sell. To determine how much to produce is can be known by decidinghow much they want to sell. Profit: Profit is the last elements of Carib happy tours company. It should know that how muchprofit they can make by delivering the products and services to their customer (Hörl, Sauer andZamboni, 2013.). It can be determine through the selling price of the product deducted the costof manufacturing the product.The importance of CVP analysis: Cost volume profit has a huge scope in different decision making of management. Ithelps in determining the quantity of the product which is required to produce for attaining thedesired, further under different cost and volume relationship it helps in knowing the profit whichcomes after selling a products to its customer. Further it help in analysis a the product andservice which are most profitable for the Carib happy tours company (Mulley and Walters,2014.). By determining it company can focus on making a products and services which aregenerating a profit. To understand any variance in its sales volume, because of any reason of theprofit can be known by the CVP analysis.Moreover it also help in understanding the level of fluctuation which can afford its selling pricefr increasing the sales and to know the new level sales. Any fixed cost which can arise at thecompany can be understand by the help of cost volume profit analysis. B.According to the given scenario, Carib tour happy hour company is growing al over theworld. It is necessary for the tour company to make a effective decision so that it can make hugeprofit and further can expand its business. There are various cost pricing method which CHTCcan used for earning the profit by selling its products and services. Market led pricing: it is the pricing method in which prices are set according to theskimming and pricing and penetration pricing (Mulley and Walters, 2014.). In thepenetration pricing method lower the cost set of products for attracting a customer forsurvive in competitive market. While in skimming pricing the tour company set a highprice because there position in market is already strong.4
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