Management Accounting Report: Financial Strategies for Prime Furniture
VerifiedAdded on 2022/12/28
|18
|4526
|20
Report
AI Summary
This report on management accounting provides a comprehensive overview of the subject, focusing on its application within Prime Furniture, a UK-based firm. The report commences with an introduction to management accounting, outlining its significance in managing business operations, financial funding, and decision-making processes. Task 1 explores the essential requirements of different management accounting systems, including financial accounting, cost accounting, inventory management, job costing, and price optimizing systems. Different methods of management accounting reporting, such as budget reports, job cost reports, and performance reports, are also explained. Task 2 delves into cost analysis, calculating costs using marginal and absorption costing techniques to prepare an income statement. Task 3 examines various planning tools used for budgetary control, discussing their advantages and disadvantages. Finally, Task 4 addresses how organizations adapt management accounting systems to respond to financial problems. The report concludes by summarizing the key findings and providing references for further reading.

Management
accounting
accounting
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems................................................................................................3
P2 Explain different methods used for management accounting reporting................................5
TASK 2............................................................................................................................................7
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs...........................................................................7
TASK 3............................................................................................................................................8
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control........................................................................................................................8
TASK 4 .........................................................................................................................................12
P5 Compare how organizations are adapting management accounting systems to respond to
financial problems.....................................................................................................................12
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15
Books and Journals:..................................................................................................................15
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems................................................................................................3
P2 Explain different methods used for management accounting reporting................................5
TASK 2............................................................................................................................................7
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income
statement using marginal and absorption costs...........................................................................7
TASK 3............................................................................................................................................8
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control........................................................................................................................8
TASK 4 .........................................................................................................................................12
P5 Compare how organizations are adapting management accounting systems to respond to
financial problems.....................................................................................................................12
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15
Books and Journals:..................................................................................................................15

⊘ This is a preview!⊘
Do you want full access?
Subscribe today to unlock all pages.

Trusted by 1+ million students worldwide

INTRODUCTION
Management accounting is a system of structured form of managing business operations
and its financial funding. It considers the facts and figures of accounts an organisation prepare to
make easy with monetary flow into organisational activities. Management of accounting is an
integrated part of management system through which a manager clearly formulate strategies
and evaluate decision making process to records and make reports of accounting standards. It
does include various tasks such as preparation of budgets, income statement, audits , journals
and books of accounts, these documents are necessary to prepare for organisation run in a long
run and have good revenue optimisation. An accounting method is a broad concept that
accumulate organisational functions and cost into an easier way. These functions are
incorporated under several governmental regulations and legal provision that bound the business
to prepare reports and data to ident8ify actual positions of the company. According to the legal
standards of CMA institution of cost management accounting, London considers an appropriate
structure of handling data and money policies within the organisation (Aaltola, and Manninen,
2021).
This report is covering the facts and figures of management accounting by
acknowledging operations of Prime furniture, a well recognised UK based firm established in
2021, as a newly appointed on the post of junior accountant, it is the duty to prepare management
reporting which shows all the essential criteria in order to teach new interns to make them well
versed with accounting principle, standards, techniques by showing clear differentiation of
different accounting methods as well as significance of reporting (Aaltola, and Manninen, 2021).
TASK 1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems.
Management accounting is the standards and approach for making accounts of company
and get clear position of company into wider terms. It includes various activities that an
accountant manager performs by thoroughly understand internal environment of business.
Basically, through managing accounts and making report gives a mangers pool of resources
towards taking effective decision for firm's durability. It consist different methods as per the
scope of business and requirement to take considerable accounting technique.
Management accounting is a system of structured form of managing business operations
and its financial funding. It considers the facts and figures of accounts an organisation prepare to
make easy with monetary flow into organisational activities. Management of accounting is an
integrated part of management system through which a manager clearly formulate strategies
and evaluate decision making process to records and make reports of accounting standards. It
does include various tasks such as preparation of budgets, income statement, audits , journals
and books of accounts, these documents are necessary to prepare for organisation run in a long
run and have good revenue optimisation. An accounting method is a broad concept that
accumulate organisational functions and cost into an easier way. These functions are
incorporated under several governmental regulations and legal provision that bound the business
to prepare reports and data to ident8ify actual positions of the company. According to the legal
standards of CMA institution of cost management accounting, London considers an appropriate
structure of handling data and money policies within the organisation (Aaltola, and Manninen,
2021).
This report is covering the facts and figures of management accounting by
acknowledging operations of Prime furniture, a well recognised UK based firm established in
2021, as a newly appointed on the post of junior accountant, it is the duty to prepare management
reporting which shows all the essential criteria in order to teach new interns to make them well
versed with accounting principle, standards, techniques by showing clear differentiation of
different accounting methods as well as significance of reporting (Aaltola, and Manninen, 2021).
TASK 1
P1 Explain management accounting and give the essential requirements of different types of
management accounting systems.
Management accounting is the standards and approach for making accounts of company
and get clear position of company into wider terms. It includes various activities that an
accountant manager performs by thoroughly understand internal environment of business.
Basically, through managing accounts and making report gives a mangers pool of resources
towards taking effective decision for firm's durability. It consist different methods as per the
scope of business and requirement to take considerable accounting technique.
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

Organization runs on profitable terms which and make immense efforts towards building
strategies and plans formulating objectives and goals. This could only be possible by managing
accounts of cash inflows and outflows, sales revenue, extra costing and availability of cash and
cash equivalents (Bochulia, and Melnychenko, 2019). These factors gain much significance at
operational level. All the departments are depend on financial funding and take decision after
knowing how much potential company gains. It is required for the interns of Prime furniture to
underrated about methods of accounting into broad ways which is described below:
financial accounting is the base of management accounting. Accounting stand rads has
been formulated from the procedure of financial accounts. T these methods are appropriate as per
the business and its size.
Basis Managerial Accounting Financial Accounting
Content Managerial accounting is the
bas of financial positions of
company that provides
assistance of financial and non
financial aspects.
Financial accounting is only
reflects facts and figures of
financial outcomes.
Uses and Purposes This accounting process
involves wide uses of making
reprts, accounts, journals, book
keeping and other also, it is
mainly used to take decision
which provide assistance to
stakeholders (Corrigan, 2018)
(Das, and Singh, 2018).
This accounting is only up to
the interest and knowledge
criteria of stakeholders so that
they would make their
contribution into companies
position.
Rules, Regulations and Laws This accounting is free from
any lawful consideration and
enjoy free formulation by the
manager of organisation.
It work on relevant data, which
involves and focus on legal
regulations in order to make
tasks and activities.
Auditing This process of accounting
need n not to take auditing
As this process consist the
legal valuation and lawful
strategies and plans formulating objectives and goals. This could only be possible by managing
accounts of cash inflows and outflows, sales revenue, extra costing and availability of cash and
cash equivalents (Bochulia, and Melnychenko, 2019). These factors gain much significance at
operational level. All the departments are depend on financial funding and take decision after
knowing how much potential company gains. It is required for the interns of Prime furniture to
underrated about methods of accounting into broad ways which is described below:
financial accounting is the base of management accounting. Accounting stand rads has
been formulated from the procedure of financial accounts. T these methods are appropriate as per
the business and its size.
Basis Managerial Accounting Financial Accounting
Content Managerial accounting is the
bas of financial positions of
company that provides
assistance of financial and non
financial aspects.
Financial accounting is only
reflects facts and figures of
financial outcomes.
Uses and Purposes This accounting process
involves wide uses of making
reprts, accounts, journals, book
keeping and other also, it is
mainly used to take decision
which provide assistance to
stakeholders (Corrigan, 2018)
(Das, and Singh, 2018).
This accounting is only up to
the interest and knowledge
criteria of stakeholders so that
they would make their
contribution into companies
position.
Rules, Regulations and Laws This accounting is free from
any lawful consideration and
enjoy free formulation by the
manager of organisation.
It work on relevant data, which
involves and focus on legal
regulations in order to make
tasks and activities.
Auditing This process of accounting
need n not to take auditing
As this process consist the
legal valuation and lawful

procedure was it involves
proper compliance of data and
security of companies
performance. This is interns by
chartered accounts, auditors.
consideration. Auditing is a
mandatory aspect to regulate
into organisation to make the
work relevant and durable
(Eaton, Grenier, and Layman,
2019).
The different management accounting systems are as below:
Cost Accounting System: it is a system through which accounting preparation are ]overall
based on cost of the organization It drives cost and cost minimization method that incurred
during production, procurement, promotion and their business practices. It includes all the cost
whether they are fixed, variable, accumulated or others. Prime furniture needs to prepare
accounts for cost analysis to identify weak area in order to take corrective measures.
Inventory Management System: it is a function of managing inventory which consist stocks of
goods whether its is totally finished or partially. It consist inventory management system which
records each and every data of good sold or unsold stock. Closing or opening inventory. This
accounting systems makes easy for the Prime furniture to maintain their goods of furniture so
that is will not get diminished or less valued into the market (Forghani, and Tavasoli, 2017).
Job Costing System: this system drives the cost and expenses incurred for as special order that
customers requested to prepare on particular demand. It demonstrate that company does not
make regular production of special goods so that it would not get reduce with raw materials and
other components so that a system has prepared to find out extra cost which are uncertain and
can be incurred due to changing demand of the customers.
Price Optimizing System; this system involves calculation of facts and data to find out actual
prices incurred during whole operation of production, selling and promotion the goods. It helps
in making decision in regard with demands of customers that reflects whether companies price
are much competitive into the market or not (Goddard, 2017).
P2 Explain different methods used for management accounting reporting.
Preparation of accounting reports play vital role in understanding accounting systems and
its functions. These reports consist on a specific period time completion of financial year. The
proper compliance of data and
security of companies
performance. This is interns by
chartered accounts, auditors.
consideration. Auditing is a
mandatory aspect to regulate
into organisation to make the
work relevant and durable
(Eaton, Grenier, and Layman,
2019).
The different management accounting systems are as below:
Cost Accounting System: it is a system through which accounting preparation are ]overall
based on cost of the organization It drives cost and cost minimization method that incurred
during production, procurement, promotion and their business practices. It includes all the cost
whether they are fixed, variable, accumulated or others. Prime furniture needs to prepare
accounts for cost analysis to identify weak area in order to take corrective measures.
Inventory Management System: it is a function of managing inventory which consist stocks of
goods whether its is totally finished or partially. It consist inventory management system which
records each and every data of good sold or unsold stock. Closing or opening inventory. This
accounting systems makes easy for the Prime furniture to maintain their goods of furniture so
that is will not get diminished or less valued into the market (Forghani, and Tavasoli, 2017).
Job Costing System: this system drives the cost and expenses incurred for as special order that
customers requested to prepare on particular demand. It demonstrate that company does not
make regular production of special goods so that it would not get reduce with raw materials and
other components so that a system has prepared to find out extra cost which are uncertain and
can be incurred due to changing demand of the customers.
Price Optimizing System; this system involves calculation of facts and data to find out actual
prices incurred during whole operation of production, selling and promotion the goods. It helps
in making decision in regard with demands of customers that reflects whether companies price
are much competitive into the market or not (Goddard, 2017).
P2 Explain different methods used for management accounting reporting.
Preparation of accounting reports play vital role in understanding accounting systems and
its functions. These reports consist on a specific period time completion of financial year. The
⊘ This is a preview!⊘
Do you want full access?
Subscribe today to unlock all pages.

Trusted by 1+ million students worldwide

purpose of making reports is to identify financial reporting of the company that needs to remain
secure and strong for the sake of shareholders and employees. These report includes significance
in organizational functioning. Performance and tasks are totally depend on the results of these
reports. Th report must consist accurate and reliable data sop that prime furniture wild not suffer
with losses and situation of winding up. Prime furniture regulate various reporting system to get
clear position of the company.
Budget Report – In an organization budget report is the most important type of reports.
It is an internal report used by managers to compare the estimated, budgeted projection with the
actual. A budget is prepared to determine in advance whether you will have enough money to do
things you need to do or you would like to do instead of sinking into debt every year. The report
will present on overall finance overview through which it going to work in the future (Kim, and
Matsumura, 2017).
Job Cost Report – This type of reports provides information related to the cost spent on
a project or task and compares with how much the company had expected. It helps to find more
efficient ways to do that task to make it more profitable we can identify higher earning areas of
the business and can less focus on low return areas through these types of report. It also helps to
reduce the wastage of available resources use them in appropriate manner to gain high profits.
Inventory and Manufacturing Budget – This report show the overall data of a
manufacturing unit that how much cost incurred from purchasing of raw material to converting
them into finished goods including labour cost for a particular period of time. Through inventory
and manufacturing budget, the management can enhance its budgets and can find more effective
ways to do the production with spending least cost on inventory management functioning .prime
furniture, UK will be able to prepare inventory evaluation at minimum cost by setting clear
budget that shows sold and unsold output and focus in selling remaining stock of inventory.
Order information report: this report is significant when a company receives a lot of
order simultaneously. It consist orders for goods into number of capacity that needs to be record
to maintain data of delivered and undelivered items. Report of orders will help in accumulation
the exact sales company has made during the financial year. In the situation of lost of data, this
report will help as a savior to regain it back.
performance report: this report is necessary to check performance of operations and its
smooth functioning which shows employees capabilities and skills to complete their work on
secure and strong for the sake of shareholders and employees. These report includes significance
in organizational functioning. Performance and tasks are totally depend on the results of these
reports. Th report must consist accurate and reliable data sop that prime furniture wild not suffer
with losses and situation of winding up. Prime furniture regulate various reporting system to get
clear position of the company.
Budget Report – In an organization budget report is the most important type of reports.
It is an internal report used by managers to compare the estimated, budgeted projection with the
actual. A budget is prepared to determine in advance whether you will have enough money to do
things you need to do or you would like to do instead of sinking into debt every year. The report
will present on overall finance overview through which it going to work in the future (Kim, and
Matsumura, 2017).
Job Cost Report – This type of reports provides information related to the cost spent on
a project or task and compares with how much the company had expected. It helps to find more
efficient ways to do that task to make it more profitable we can identify higher earning areas of
the business and can less focus on low return areas through these types of report. It also helps to
reduce the wastage of available resources use them in appropriate manner to gain high profits.
Inventory and Manufacturing Budget – This report show the overall data of a
manufacturing unit that how much cost incurred from purchasing of raw material to converting
them into finished goods including labour cost for a particular period of time. Through inventory
and manufacturing budget, the management can enhance its budgets and can find more effective
ways to do the production with spending least cost on inventory management functioning .prime
furniture, UK will be able to prepare inventory evaluation at minimum cost by setting clear
budget that shows sold and unsold output and focus in selling remaining stock of inventory.
Order information report: this report is significant when a company receives a lot of
order simultaneously. It consist orders for goods into number of capacity that needs to be record
to maintain data of delivered and undelivered items. Report of orders will help in accumulation
the exact sales company has made during the financial year. In the situation of lost of data, this
report will help as a savior to regain it back.
performance report: this report is necessary to check performance of operations and its
smooth functioning which shows employees capabilities and skills to complete their work on
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

time and take effective measure if found something weak into report. This report is presentable
in front of shareholders to show actual performance criteria of company
TASK 2
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income statement
using marginal and absorption costs.
What is meant by cost: cost is the term which occur in every organization activity during the
production, procurement and distribution process. Cost factor is one of the major factor that
needs to be minimize to increase profit over cost.
Different costs and cost analysis: there are various cost and cost analysis, this is done for
identify exact financial position of the company by determining various cost and its significance
into business practice.
Variable cost: it is the cost that gets decrease and increase with the level of output. As
much as cost ride in the production that will significant make change in the rise of variable cost.
Fixed cost: these cost does not changes within the change in output. As they are fixed
irrespective of change in output of production like rent, electricity etc (Lepistö, and Ihantola,
2018).
Marginal cost: it is the cost which occurred with the one unit extra output in the
production. This known as one unit extra consumption of input.
Absorption cost: this cost defines overall cost of manufacturing unit which include
direct and indirect costs.
Cost volume profit- CVP analysis:
this profit analysis also CVP analysis that shows operating costs and its causes on
different stages. Break even analysis is a part of this cost that considers profit and cost needs to
equal or profit must be more than cost.
Flexible budgeting:
this budget is totally the base of sales through which expenses and income get verified on
the quality sold. The formula of budgeting is actual price of unit sold* price per unit.
Normal cost and standard costing
in front of shareholders to show actual performance criteria of company
TASK 2
P3 Calculate costs using appropriate techniques of cost analysis to prepare an income statement
using marginal and absorption costs.
What is meant by cost: cost is the term which occur in every organization activity during the
production, procurement and distribution process. Cost factor is one of the major factor that
needs to be minimize to increase profit over cost.
Different costs and cost analysis: there are various cost and cost analysis, this is done for
identify exact financial position of the company by determining various cost and its significance
into business practice.
Variable cost: it is the cost that gets decrease and increase with the level of output. As
much as cost ride in the production that will significant make change in the rise of variable cost.
Fixed cost: these cost does not changes within the change in output. As they are fixed
irrespective of change in output of production like rent, electricity etc (Lepistö, and Ihantola,
2018).
Marginal cost: it is the cost which occurred with the one unit extra output in the
production. This known as one unit extra consumption of input.
Absorption cost: this cost defines overall cost of manufacturing unit which include
direct and indirect costs.
Cost volume profit- CVP analysis:
this profit analysis also CVP analysis that shows operating costs and its causes on
different stages. Break even analysis is a part of this cost that considers profit and cost needs to
equal or profit must be more than cost.
Flexible budgeting:
this budget is totally the base of sales through which expenses and income get verified on
the quality sold. The formula of budgeting is actual price of unit sold* price per unit.
Normal cost and standard costing

Normal cost is the fixed and actual cost occurred during the production process and
output will be according to that cost. Whereas, standard costing is that type of cost which include
predetermination amount that could be occurs during production.
Activity based costing: under this costing method, both variable and fixed cost into
operations to determine actual process of each input (Nagari, Marsely, and Nuraini, 2020).
Cost play major role in setting prices for a product. By determining actual cost Prime
furniture will be able to decide how much percentage of profit it could make from market. The
minimum they incur cost the maximum they going to make revenue.
Inventory cost: this stock is related with the stocks of opening and closing inventory which
organization suffered while maintaining and retaining into warehouse. Inventory cost is inclusive
of all cost such as ordering goods, keeping them and retention of long period. These cost differs
after a specific time period due to change in prove and other factors.
Types of inventory cost:
There are three type of cost which are mentioned below:
ordering cost: this cost is based upon giving orders to fulfill availability of inventory
into organization. It could be termed as fixed cost which is free from the units ordered an charge
a fixed amount. This could be involve cost, bank charges, communication charges.
carrying cost-accounting; this cost is said to be opportunity cost which could be occur
in future and are uncertain. It includes risk of inventory, storage, capital and service cost that
would create loss of the operation.
stock out cost: these cost incurred at the situation of urgency when organization require
rapid delivery and change in suppliers within limited time.
TASK 3
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control.
Budgets: budgets are essential part of business operations. They give an useful insights
of what should be done and In what cost. Budgets needs to be accurate for implementing and
executing for each department. This involve all cost and amount of each segment of
manufacturing unit so that overall activities would be perform in that way. There are various
types of budgets that gain their much importance for effective working.
output will be according to that cost. Whereas, standard costing is that type of cost which include
predetermination amount that could be occurs during production.
Activity based costing: under this costing method, both variable and fixed cost into
operations to determine actual process of each input (Nagari, Marsely, and Nuraini, 2020).
Cost play major role in setting prices for a product. By determining actual cost Prime
furniture will be able to decide how much percentage of profit it could make from market. The
minimum they incur cost the maximum they going to make revenue.
Inventory cost: this stock is related with the stocks of opening and closing inventory which
organization suffered while maintaining and retaining into warehouse. Inventory cost is inclusive
of all cost such as ordering goods, keeping them and retention of long period. These cost differs
after a specific time period due to change in prove and other factors.
Types of inventory cost:
There are three type of cost which are mentioned below:
ordering cost: this cost is based upon giving orders to fulfill availability of inventory
into organization. It could be termed as fixed cost which is free from the units ordered an charge
a fixed amount. This could be involve cost, bank charges, communication charges.
carrying cost-accounting; this cost is said to be opportunity cost which could be occur
in future and are uncertain. It includes risk of inventory, storage, capital and service cost that
would create loss of the operation.
stock out cost: these cost incurred at the situation of urgency when organization require
rapid delivery and change in suppliers within limited time.
TASK 3
P4 Explain the advantages and disadvantages of different types of planning tools used for
budgetary control.
Budgets: budgets are essential part of business operations. They give an useful insights
of what should be done and In what cost. Budgets needs to be accurate for implementing and
executing for each department. This involve all cost and amount of each segment of
manufacturing unit so that overall activities would be perform in that way. There are various
types of budgets that gain their much importance for effective working.
⊘ This is a preview!⊘
Do you want full access?
Subscribe today to unlock all pages.

Trusted by 1+ million students worldwide

Cash budget: under this type of budget, management could accumulate how cash is floating into
organization. Prime furniture would enable feature of checking how would they acquire cash and
from which sources.
Advantage: it will help prime furniture to be in a sound position of liquidity funds so that
working capital get managed efficiently.
Disadvantage: these budget not nor promise of accuracy and relevant figures as they are
flexible that could be change while managing practical operations.
Sales budget: this type of budget helps in determining sales during a specific period of time.
Strategies will formulate more accurately while assisting budgets into consideration.
Advantages: sales budget is necessary to formulate in order to gain competitive
advantage into marketing by taking high turnover. Prime furniture needs to prepare strategies and
analyses predetermined budget to grow sales (Sugiyanto, and Candra, 2019).
Disadvantages: due to changing demand and dynamic environment, sales could get dis
balance according to budget as people demands change very often.
The company’s budget for Quarters 1and 2 are as follows:
Per Quarter: units
Production 80,000 units
Sales 80,000 units
Opening Stock nil
Closing Stock nil
Budgeted Quarterly Statement of Profit or Loss :
£ £
Sales 80,000
Production Cost of Sales:
organization. Prime furniture would enable feature of checking how would they acquire cash and
from which sources.
Advantage: it will help prime furniture to be in a sound position of liquidity funds so that
working capital get managed efficiently.
Disadvantage: these budget not nor promise of accuracy and relevant figures as they are
flexible that could be change while managing practical operations.
Sales budget: this type of budget helps in determining sales during a specific period of time.
Strategies will formulate more accurately while assisting budgets into consideration.
Advantages: sales budget is necessary to formulate in order to gain competitive
advantage into marketing by taking high turnover. Prime furniture needs to prepare strategies and
analyses predetermined budget to grow sales (Sugiyanto, and Candra, 2019).
Disadvantages: due to changing demand and dynamic environment, sales could get dis
balance according to budget as people demands change very often.
The company’s budget for Quarters 1and 2 are as follows:
Per Quarter: units
Production 80,000 units
Sales 80,000 units
Opening Stock nil
Closing Stock nil
Budgeted Quarterly Statement of Profit or Loss :
£ £
Sales 80,000
Production Cost of Sales:
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

Variable 52,000
Fixed 16,000 (68,000)
12,000
Selling & Administration Costs(fixed) (
5
,
2
0
0
)
Profit 6,800
Actual production, sales and stock in units for quarters 1 and 2 are:
Quarter 1 Quarter 2
Opening Stock 0 12,000
Production 78,000 66,000
Sales 66,000 74,000
Closing Stock 12,000 4,000
Pricing strategies: Deciding price as per market demand is the essential factor to analyses.
people are not ready to pay high price for a product they get into low price due to competition.
So that company needs to take appropriate pricing strategies which will gain competitive
strategies into market.
Cost plus pricing: This strategy based on calculation. Prime furniture must use this
strategy to get easy valuation of cots.
Fixed 16,000 (68,000)
12,000
Selling & Administration Costs(fixed) (
5
,
2
0
0
)
Profit 6,800
Actual production, sales and stock in units for quarters 1 and 2 are:
Quarter 1 Quarter 2
Opening Stock 0 12,000
Production 78,000 66,000
Sales 66,000 74,000
Closing Stock 12,000 4,000
Pricing strategies: Deciding price as per market demand is the essential factor to analyses.
people are not ready to pay high price for a product they get into low price due to competition.
So that company needs to take appropriate pricing strategies which will gain competitive
strategies into market.
Cost plus pricing: This strategy based on calculation. Prime furniture must use this
strategy to get easy valuation of cots.

Competitive pricing: prices needs to low from competitive rivalry to get stand into
market.
Value based pricing: price of prime furniture must be valued on the basis of product
worth that would easily consume by customers.
Price skimming: price must be high and get is lower after bargaining of customers.
Penetration pricing: price must be setting as low to high to gain image on the market.
Supply and demand: Price is affected by many factors as it is the most concerned of all.
Demand and supply are the major factor in changing price of organization into leading market.
When price gets low, demands gets high for the product and vice versa. But demand has direct
relation with supply. When demand rises, supply will also rises. These factors are considers in
Law of demand that states demand and price have inverse relation due to customers money
utility power, as they are not ready to pay high prices and easily shift their demand. So that as
decline in prices leads to upwards customer demand.
Strategic planning:
Swot analysis:
it is an appropriate analysis which will result in strategic planning for prime furniture by
evaluating their strength weakness, and opportunities to overcome the threats.
Strength Weaknesses
Prime furnitures have good varieties in
product category with reasonable price.
The company have management of
addressing rules and work according to
that.
Due to less exposure of company, there
are least number of shareholders
entitled with the them.
They does not have good accurate
report planning which make them less
efficient with cost.
Opportunity Threats
Prime furnitures have the best UK
market to grow and expansion. Capital
cost must be maintained to gain
technological advancement.
The major threat for prime furniture are
competition into UK market due to
recent incorporation there are a lot of
companies competing into existing
market.
Value based pricing: price of prime furniture must be valued on the basis of product
worth that would easily consume by customers.
Price skimming: price must be high and get is lower after bargaining of customers.
Penetration pricing: price must be setting as low to high to gain image on the market.
Supply and demand: Price is affected by many factors as it is the most concerned of all.
Demand and supply are the major factor in changing price of organization into leading market.
When price gets low, demands gets high for the product and vice versa. But demand has direct
relation with supply. When demand rises, supply will also rises. These factors are considers in
Law of demand that states demand and price have inverse relation due to customers money
utility power, as they are not ready to pay high prices and easily shift their demand. So that as
decline in prices leads to upwards customer demand.
Strategic planning:
Swot analysis:
it is an appropriate analysis which will result in strategic planning for prime furniture by
evaluating their strength weakness, and opportunities to overcome the threats.
Strength Weaknesses
Prime furnitures have good varieties in
product category with reasonable price.
The company have management of
addressing rules and work according to
that.
Due to less exposure of company, there
are least number of shareholders
entitled with the them.
They does not have good accurate
report planning which make them less
efficient with cost.
Opportunity Threats
Prime furnitures have the best UK
market to grow and expansion. Capital
cost must be maintained to gain
technological advancement.
The major threat for prime furniture are
competition into UK market due to
recent incorporation there are a lot of
companies competing into existing
⊘ This is a preview!⊘
Do you want full access?
Subscribe today to unlock all pages.

Trusted by 1+ million students worldwide
1 out of 18
Related Documents

Your All-in-One AI-Powered Toolkit for Academic Success.
+13062052269
info@desklib.com
Available 24*7 on WhatsApp / Email
Unlock your academic potential
Copyright © 2020–2025 A2Z Services. All Rights Reserved. Developed and managed by ZUCOL.