ACC00724: Managerial Accounting - Pacific Telemet Ltd Proposals

This document presents a student's solution to an accounting for managers assignment, focusing on the evaluation of proposals for Pacific Telemet Ltd. The report analyzes three different proposals from the production manager, sales manager, and marketing director, assessing their potential impact on sales, profitability, and overall business strategy. Additionally, the solution includes an explanation of bid pricing for Go-Go-Grow Limited and a reflection on the student's personal background and how their education has prepared them for a future accounting career. Desklib offers a wide range of study resources, including past papers and solved assignments, to support students in their academic endeavors.

Running head: ACCOUNTING FOR MANAGERS
Accounting for Managers
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
Answer to Question 1: Pacific Telemet Ltd...............................................................................2
Answer to Question 1: Go-Go-Grow.........................................................................................6
Answer to Requirement 1.......................................................................................................6
Answer to Requirement 2.......................................................................................................6
Answer to Question 3: Personal Background............................................................................7
References..................................................................................................................................8

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Answer to Question 1: Pacific Telemet Ltd.
To,
The CEO,
Sherri Watkins,
Pacific Telemet Ltd.
Date: 18.01.2019
Subject: Three Proposals Evaluation
The main aim behind the development of this report is to provide justified response to
the three proposals that the different staffs of the company have taken into consideration with
the aim to discover the metiers as well as demerits of each of the proposals. For conducting
the needed analysis, certain computations have been made and these can be found in below:
Existing Plan
Proposal for the Production Manager

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Proposal of the Sales Manager

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Proposal of the Marketing Director
Proposal 1: David Groate is the production manager of Pacific TelemetLtd. The clear fact
that can be seen from the proposal of the production manager that sales of the company can
be majorly improved by spending on quality; at the same time it ensures the enhancement of
the profitability (Collier 2015). The main reason behind this statement is that it ensures the
increase in both sales revenue and volume of sales. However, certain aspect can be identified
in this particular case that it would increase the total variable cost of the company at the same
time. This particular context demand the mentioning of the fact that all the business

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organizations want to ensure the presence of greater contribution margin when the business
organizations want to ensure the longer profitability of the companies. This particular aspect
is missing from this particular proposal as the margin of contribution per unit is bottommost
when it is compared to the other two proposals that is $240. Apart from this, the break-even
point is determined at 6071 units where the calculation of margin of safety is done at 9529
units; and these two aspects are higher when compared to other two proposals. This particular
aspect indicates towards the fact that it is needed for the company to increase the minimum
amount of sales so that they can avoid the losses (Noreen, Brewer and Garrison 2014).
Proposal 2: Kirsten Arnold is the sales manager of Pacific Telemet Ltd. It can be seen from
the proposal of Kirsten Arnold that the sales volume would be decreased by 12% from the
existing plan; at the same time, increase in the selling price per unit would be there along
with the increase in the fixed cost (Kaplan and Atkinson 2015). For this reason, the main
demerit of this particular proposal is the decrease in the sales volume. However, comfortable
increase in the sales price is there and this aspect leads to the increase in the margin of
contribution per unit to $300 that is $60 more than the existing plan. However, when this
proposal is considered for the longer lifetime, there is not any sustainability of this particular
proposal as it has negative growth in volume along with the increase in the selling prices and
fixed cost due to the fact that there will be occurrence of the market pressure. In the presence
of all these aspects, $2,088,000 is the calculated net operating income and this amount of net
operating income is lower than other the other two proposals (Drury 2013).
Proposal 3: Jess Sutherland is the marketing director of Pacific Telemet Ltd. According to
the proposal of Jess Sutherland, this proposal can be considered as an exceptional strategy for
providing rebate to the first 2500 customers and this particular aspect can be regarded as the
unique selling proposition (USP) of this particular proposal (Khan 2015). In the presence of
this reason, highest net operating income can be seen under this particular proposal.

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However, in this context, this aspect needs to be kept in mind that sustainability of this
strategy may not be seen in the long-run due to the fact that there would be dissatisfaction
among majority of the customers in case they fail to ensure the initial purchase of 2500
orders. In the presence of this aspect, there might be lack of enthusiasm among the customers
for referring the products to their friends, families and other acquaintances. Moderate
contribution margin can be seen in this proposal in the presence of minor increase in the fixed
costs(Khan 2015).
Answer to Question 2: Go-Go-Grow
Answer to Requirement 1
Answer to Requirement 2
To,
The CEO,
Go-Go-Grow Limited
Date: 18.01.2019
Subject: Explanation for the Bid Price

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According to the above table, one can observe the fact that $72,00,000 is the price of
the bid in case 90000 units is the annual capacity of the company. Apart from this, as there
would be sale in the company for a special order, there would be no incurrence of the costs
for the variable selling as well as administrative costs; and there is no need to incur the fixed
costs(Hartley 2014). This particular aspect can be regarded as a great chance for the business
organization due to the fact that it would be able for the company for earning more amount of
profit from the contract with Mantel and the company would be able in receiving the future
orders at the same time. However, in case Mantel is not satisfied with the result of the output
of the contract, net profit would be decreased along with the increase in the other costs at the
same time (Hartley 2014).
Answer to Question 3: Personal Background
I would like to mention the fact that my previous education has provided me with
major assistance to obtain deeper insight on the different kinds of topic that have been taught
in the classes like analysis of financial statements, accounting reports and the management of
working capital. In this particular course, I have been identified with certain topics like cost
accounting, management accounting, activity based costing, full costing, planning, budgetary
control, organizational finance and all these topics have been majorly helpful in increasing
my knowledge base. I would like to mention further that this gained knowledge on these
topics will majorly assist me in my future accounting career due to the fact that it would
assist me in dealing with the real life accounting issues.

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References
Collier, P.M., 2015. Accounting for managers: Interpreting accounting information for
decision making. John Wiley & Sons.
DRURY, C.M., 2013. Management and cost accounting. Springer.
Hartley, W.C., 2014. An introduction to business accounting for managers. Elsevier.
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Khan, M., 2015. Accounting: Financial. In Encyclopedia of Public Administration and Public
Policy, Third Edition-5 Volume Set (pp. 1-6). Routledge.
Noreen, E.W., Brewer, P.C. and Garrison, R.H., 2014. Managerial accounting for managers.
New York: McGraw-Hill/Irwin.