StudentShare solutions
Triangle menu

On introduction finance and accounting - Essay Example

Nobody downloaded yet

Extract of sample
On introduction finance and accounting

That for the energy drink, the net profit value as a percentage of sales is estimated at between 12% to 18%. That the fixed cost will be estimated as the difference of the gross profit and the net profit figures That the direct costs; both for materials and labor is estimated at between 22% to 27% of the sales figure. 2. Assuming the drink being produced is of the 250ml packet in a bottle type of packaging. Assuming the number of units of the drink produced is 6000 units, the variable cost per unit is provided as follows: - direct materials $2, direct labor $4, variable manufacturing overhead $1, variable selling and administration expenses $3. The fixed costs of the product per annum are estimated as follows; fixed manufacturing overhead $30,000 and fixed selling and administration is $10,000. The selling price per unit produced is estimated as $15. The marginal costing statement will appear as follows: Product cost per unit Direct materials $2 Direct labor $4 Variable manufacturing overhead $1 Product cost per unit $7 The variable costs for the production of the drink for the 6000 units will be 6000*$7 = $42000. The costs for the production of the drink for the whole year will therefore be as follows: Total variable costs $42000 Fixed manufacturing overhead $30000 Fixed selling and administration $10000 Total costs $82000 The total cost per unit for the drink per month will be $82000/12 = $6833.3. The $30000 fixed manufacturing overhead will be is charged off in total against the income as a period expense. The same applies to the selling and administration expense. Under this form of costing system, all the variable costs of production are included in the product cost. This means that if the variable cost of the product per unit is $7, then only $7 will be deducted as the cost of goods sold per unit. All the unsold units will also be carried in the balance sheet inventory account at just $7. 3. Produce a break-even analysis (table and graph) for your product based on 12 months activity Breakeven point shows the level of sales by a business to enable it cover all its costs. The sole objective of breakeven is to enable the business be able to work out the contribution made from the sale of each unit. This is because the amount at which each unit is sold will significantly contribute to pay for the indirect costs and the fixed costs of the business. Total units produced 6000 Total revenue 90000 Contribution margin 50000 Total fixed cost 40000 Break even units 5000 NB: The variable cost per month will be; 42000/12 = $3500 and the Break even in units will be; 40000/ (15-7) = 5000 units The Break Even Table JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Units Sold 500 500 500 500 500 500 500 500 500 500 500 500 Total Revenue in $ 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 7500 Variable Costs in $ 3500 3500 3500 3500 3500 3500 3500 3500 3500 3500 3500 3500 Contribution margin 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 4166.7 Fixed costs Manufacturing in $ 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 S & D 833.3 833.3 833.3 833.3 833.3 833.3 833.3 833.3 833.3 833.3 833.3 833.3 Total FC 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 3333.3 Break Even Units 416.7 416.7 416.7 416.7 ...Show more


Date 1. The assumptions used to produce the key financial figures are varied and they are to ensure that the financial data used are realistic and reliable by the users of the financial information. The assumptions include the following:- That the cost of sales figures to be used in the calculations is 45% of the identified sales figure…
Author : alana73
Essay on introduction finance and accounting essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Essay on introduction finance and accounting"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Introduction to Accounting and Finance
The quality of the product and well managed business operations are always prone to capture the taste buds acceptability. Moreover, if the product is marketed properly, then it can help the product to be successful. The given report, hence, provides the financial feasibility of the project which is about introducing a new drink based providing potential investor an attractive opportunity to enter the growing market and earn attractive returns.
12 pages (3000 words) Essay
Introduction to Accounting and Finance
It cost me less than half pound per jar to make and I can sell all I can make for 3 pounds. I would need an investment of 80.000 pounds in equipment, marketing and starting supplies to make and sell 15.000 jars of gel per month. I can rent sufficient space of 200 m2 that includes small office for 500 pounds per month.
5 pages (1250 words) Essay
Finance and Accounting Essay
It also assesses and supervises financial organizations for security and reliability. It also embarks on consumer-protection roles, and administers financial institutions in receivership. Insured institutions are required to put indicators at their business premises declaring that their deposits are supported by the full trust and credit of the U.S.
7 pages (1750 words) Essay
Finance and Accounting Essay
PD: the companys Preferred Stock Dividends 2. RP: the companys Expected Redemption of the Preferred Stock 3. RD: the company’s Expected Redemption of Debt 4. E: Expenditures for sustaining cash flows Dividend valuation model assuming a dividend cover of 2, a constant dividend in perpetuity and a cost of capital of 20% Triumph plc ?
8 pages (2000 words) Essay
Financial statements advice to Sparkle Plc. Finance and Accounting, Essay
Finance and Accounting, Essay. This study aims to advice Sparkle Plc. and its board of directors regarding the information that should be included in the annual report of the company along with the financial statements. Information that is significant and has to be included is termed as compulsory information according to the Company Act of 2006, while voluntary information is those which are important but optional and may be included at the discretion of the company.
11 pages (2750 words) Essay
Finance and Accounting Essay: Procter & Gamble
According to the paper the company wants to design products which will achieve maximum customer delight and conserve natural resources. It wants to win the confidence of the customers and help its leading brands to reach out different countries. It mainly wanted to focus on the core business and become strong global market leaders.
7 pages (1750 words) Essay
Finance and Accounting Essay
Secondly, the fact that the enhanced disclosure is as well not enough and finally, there is the objective of realizing an improvement in the quality and the comparability of the financial reporting. During the analysis of the lessee’s financial position, it is evident that many users tend to want to capitalize operating leases through adjustments made to the reported financial information.
4 pages (1000 words) Essay
Introduction to Accounting & Finance
(Blurt it n.d.)Their profit sharing ratio can be dependent on the capital that each associate injects. A disadvantage of this kind of business
4 pages (1000 words) Essay
Introduction to Accounting and Finance
Worst still, some of the people interviewed admitted to be applying oily hair products to their hair which was already oily type. Without much ado, the study is going to narrow down on these products and
4 pages (1000 words) Essay
Introduction to accounting
The company will wholly acquire Ranbaxy this year which will make sun pharmaceutical the largest pharmaceutical company of India. Sun pharma has also merged with MSD to provide augmented and differentiated product in the emerging markets. The shares
3 pages (750 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us