Finance Homework: Depreciation, Budgeting, Variance Analysis
VerifiedAdded on 2020/04/07
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Homework Assignment
AI Summary
This finance assignment solution addresses several key concepts in financial management. Question 1 focuses on depreciation calculations for a fleet of executive coaches, including the determination of annual depreciation expense, total investment, and net cash inflow, leading to the calculation of accounting rate of return, payback period, net present value (NPV), and internal rate of return (IRR). Question 2 delves into budgeting, specifically sales mix analysis, unit contribution margin calculations for different car models (Punto, Polo, BMW), and the determination of break-even sales, considering labor hour constraints and other factors like customer preferences. Question 3 examines pricing strategies and break-even analysis for various products, including the calculation of total revenue, variable costs, gross margins, and break-even units. Question 4 explores the roles and responsibilities of a budget committee, differentiating between incremental and zero-based budgeting, and explaining budgetary slack. Finally, Question 5 discusses variance analysis as a critical control mechanism, emphasizing its importance in standard costing systems, and provides a material price variance calculation.
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