Detailed Business Plan: Managerial Accounting for Vic Coffee Project

This business plan analyzes Vic Coffee, a food service venture within DPD headquarters. It details the break-even points for sandwiches and coffee, projecting sales and costs to determine profitability. The plan includes a sales forecast for both sandwiches and hot drinks, alongside a cash flow statement for several months. The student explores managerial accounting concepts, demonstrating how these tools inform business decisions, predict future growth, and evaluate the financial impact of operational activities. The assignment highlights the importance of sales forecasting in identifying trends and managing costs to achieve sustainable profits. The analysis uses break-even analysis, sales forecasts, and cash flow statements to provide crucial information for decision-making and financial planning.

Business plan for managerial
accounting
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Breakeven point of sandwich.......................................................................................................3
Breakeven point of coffee............................................................................................................4
Sales forecast...............................................................................................................................6
CONCLUSION................................................................................................................................7
REFRENCES...................................................................................................................................7
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INTRODUCTION
Business plan is a process through which mangers decided the guideline and framework which
provide them direction to run their business organizations activities. In this report Vic
organization has been taken which used to revelled new business of hot drinks and sandwich
within the DPD headquarter. For his purpose they formulated and business plan. In this report
calculation of various statement of among is prepared though which mange identifying future
growth and profitability rate by applying these business operational activities,. They also used
sales forecasts through which they can recognize changes of sales quantities affect the business
profitability rate.
TASK 1
Breakeven point of sandwich
Break even analysis refers to ascertainment of level of operations where total revenue equals to
total cost. It is an analysis
The organization use this to forecast profit accurate in upcoming future activities and it is
absolutely essential to determine the relationship between cost of sandwich and hot drinks with
profits. Break even analysis is used in setting up flexing budgets used to determine the probable
profit or loss at any level of operations.
In its broad sense break even analysis refers to the study of relationship between cost, volume
and profit at different levels of sales or production.
In its narrow sense it refers to a technique of determining that level of operations where revenue
total equal total expenses that means point of no profit and no loss.
Thus it is calculated if the approximate sales volume required to just covering cost below which
production would be unprofitable and above which it would be profitable. Break even analyses
focuses on the relationship between fixed cost variable cost and profit (Carenys and Moya,
2016).
I t is used in setting up flexible budgets which shows costs at various level of activities. It helps
management in the evaluation of performance for control purpose. It is useful in formatting
pricing policies by projecting the effect than various price structures have on costs and profits
especially when the demand for the products is elastic. This method is used by managers of
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organization to make decision in short run tactics decision shift working acceptance of special
order choice of sales mix. Break even point is a point where sales revenue equals the cost to
make and sell the products and no profit and loss is repeated. It is the level of sales at which
profit zero t breakeven point sales equal to fixed cost plus variables. This concept is future
explained but the following equation
vegetables, or sauces we use to produce it.
initial from this thought and taking into explanation that the sale target for sandwiches, in the
first 3 months, is 100 piece per day, the charge for produce a sandwich can be strong-minded as
follows: the amount necessary to purchase the crop from which they are complete is alienated by
100.
£ 76.98:100=£0.7698/cost of production/ sandwich (Hoque, Z., 2014).
To make the business profitable I consider that the key element is to keep the
production price per unit under £1 pound, regardless of the number of units sold
Break even sales’ fixed cost + variable cost
Breakeven point is also called as critical point or equilibrium point or balancing point.
Breakeven point of coffee
Calculation of break even point of Sandwich for 3 months
Particular Amount
Total
amount
Sales , 100 sandwich each day @ 2.5 22500
cost of good sold .7698 6928
contribution 15571
fixed cost 2400
profit 13171
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Sales forecast for 1 month
100 sandwiches per day 22500
150 hot drinks per day 4500
Total sales 27000
Cost of production
direct cost 3225
fixed cost 800
Total cost 4025
profit 22975
Break even pint = Fixed cost / P/v ratio = 3478
P/v ratio = contribution / sales*100 69 %
21693 / 16600 = 13.3
13984/ 13. 3% = 1051 units
Cash flow statement
Cash flow statement can be deified as statement which is used for providing information
regarding cash inflow and cash out flow activities of business organization. Vic coffee provided
coffee and breakfast, sandwich products to customers. They start a new business and expand
their market with the new projects. They started sandwich and ne hot drink facilities to their
customers though which they are able to attend the gain. Cash flow statement helps in identifying
those activities though which they can easily recognized the cash inflow and cash out flow
activities. The organization earn income from selling of hot drinks and sandwiches they took
high cost of their sandwich as the required more ingredients and cost of each sandwich is much
higher then compare to the coffee. The Vic organization can out flow activities generate due to
purchasing of material and prodt and given aeries to their workers (Ramachandran Rackliffe and
Ragland, 2016).
Cash flow statements serves an essential tool of short term financial analysis and planning
technique. It is very useful in preparing cash budgets as cash is various basis of business
operations cash flows proves very useful in evaluating the cash position of the concern. The
projected cash flows statements helps managers in exploring the possibilities of repayment of
loan term debts which depends upon the availabilities of cash. Cash flow stamens can be used for
making appraisal in various capital investment projects. Vic organizing it will provide vase of
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future project and acuities related to the future. Business organizations uses of the cash flow
statement of prevision year ad projected cash flow statement reveals deviations of actual form
budget .This help in taking requisite for taking corrective action’s the case of VIC organization
cash flow statement represent the cash inflow and cash out flow catches generate during business
operations of selling coffee and other hot drinks and sandwich product(Iskandar, 2015).
Cash Flow statment
Cash Budget
Jan Feb March April May Jun Jul Aug Se
Cash Budget
Jan Feb March April May Jun Jul Aug Se
Cash inflows
Sandwich price 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5
Sandwich (units) 2400 2400 2400 3600 3600 3600 3600 4320
Total sales for sandwich 6000 6000 6000 9000 9000 9000 9000 10800 1
Hot drinks price 1 1 1 1 1 1 1 1
Hot drinks (units) 3600 3600 3600 4800 4800 4800 4800 4800
Total sales for hot drinks 3600 3600 3600 4800 4800 4800 4800 4800
TOTAL INCOME 9600 9600 9600 13800 13800 4800 13800 15600 1
Cash outflow
salaries 1000 1000 1000 1000 1000 1000 1000 1000
purchase 3648 3648 3648 5172 5172 5172 5172 5726.4 57
Drinks 468 468 468 624 624 642 624 624
Sandwich 1848 1848 1848 2777.2 2777.2 2777.2 2777.2 3326.4 33
Rent 800 800 800 800 800 800 800 800
travel cost 100 100 100 100 100 100 100 100
TOTAL OUTFLOW 7864 7864 7864 10473 10473 10491 10473 11577 1
Net Cash flow 1736 1736 1736 3327 3327 3309 3327 4023
Sales forecast
Sales forecast is a statement which also cash flow statement more over it does not consider the
operation financiering and investing activities moreover it considered only saes related
transaction and help in providing essential information regarding future sales and profitable it
rate of business organization. the manger of Vic organization use sales forecast through which
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they can easily identify the changes of forecast affect and profit rare and hoe must profit they
earn by selling o sandwich and hot RDING AN VARIOUS RIC AND VARITY OF DFFRENT
LEVEL .
Sales forecast help manger of Vic to detriment the price through which they can easily
recognizes ad generate more profit. Sales forecast statement shows 1st months saps an then 4th
months and sells of 2 moths though which mangers easily recognize if they change the
production process then the effect in another business manufacturing cost and profitability rate of
business organization. Sales forecast help in mangier accounting and achieve sustainable
business profit. It will be a effective tool of businesses organization through which they can
reduce the cost of and risk of future business activities. It will also us fill in providing accrete
knolled regarding future activities and profit earn by business activities. As the Vic is part of and
it s newly salves’ thus it is essential for minimize the cost of business activates though cognize
them Sales forecast also useful for proved essential ad relevant business conformation those
which mangers will be able to grenade and create future polities it will help in them to achieve
goals on buses organization. Sales forecasting is relevant method an tool use by business
(Susanto, 2015).
Sales forecast for 1 month
100 sandwiches per day 22500
150 hot drinks per day 4500
Total sales 27000
Cost of production
direct cost 3225
fixed cost 800
Total cost 4025
profit 22975
organization of accounting. This is also useful for manger their all the relented area and faction
of business activities.
CONCLUSION
From the above analysis it has been concluded that managerial accounting is essential part of
business organization as it will useful for taken decision. By the tools of manger accounting, saes
forecast, cash flow statement and breakeven anywise manger can easily recognized the value of
profits , sales in future activities and business activities though which they can able to generate
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profits and those activities which incurred higher cash outflow. This are help in providing
essential and vital information for business organization.
REFRENCES
Books and journals
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Carenys, J. and Moya, S., 2016. Digital game-based learning in accounting and business
education. Accounting Education, 25(6), pp.598-651.
Hoque, Z., 2014. 20 years of studies on the balanced scorecard: Trends, accomplishments, gaps
and opportunities for future research. The British accounting review, 46(1), pp.33-59.
Ramachandran Rackliffe, U. and Ragland, L., 2016. Excel in the accounting curriculum:
perceptions from accounting professors. Accounting Education, 25(2), pp.139-166.
Iskandar, D., 2015. Analysis of factors affecting the success of the application of accounting
information system. International Journal of scientific & Technology research, 4(2),
pp.155-162.
Susanto, A., 2015. What factors influence the quality of accounting information. International
Journal of Applied Business and Economic Research, 13(6), pp.3995-4014.
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