The operating statement - Essay Example

Only on StudentShare

Extract of sample
The operating statement

Variable costs are costs are those, which vary with the level of activity while fixed costs are those, which are constant irrespective of the level of activity. However, the increase or decrease of fixed costs is not related to the level of activity alone as they may though change over a period. Variable costs on the other hand are directly related to the business activity; they include costs such as those for raw materials and inventory. They vary in the sense that the more of each you need in production the more the costs will increase (Czopek 2004). When the budgeted of these costs is more than the actual, then the discrepancy is termed as an adverse and a control measure must be put in place in actual/real time (Czopek 2004). The operation statement will therefore help the management in identification of each of the costs, when they are favorable as well as when they are adverse and formulate the control mechanisms for normal operations. As there is no single direct way or strategy of cost management and control, the mangers will be forced to examine the whole business strategy and make a determination of how to achieve a cost reduction without interfering with the business operations. Variable cost control Variable costs will rise with expansion in production and fall when production falls; this is quite useful for effective decision-making. ...Show more


Date Irrespective of what business one is involved in, the major aim of most businesses is to make profits and managers are the custodians of the same to the owners. Profits can be made when sales are increased hence a rise in sales revenue…
Author : ansleyrath
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The operating statement"
with a personal 20% discount.
Grab the best paper

Related Essays

Financial Statement Analysis
3. a. Sales are projected to increase in coming years. 4. c. priced correctly 5. d. Company X has higher leverage than Company Y. 6. a. $129 7. a. 0.2 8. a. $ 416.25 9. b. 5.00% 10. a. 9.49% 11. c. 13.36% Problems 1. a. How and when should K2 account for their warranty?
4 pages (1000 words) Assignment
Economic Value Added (EVA) Statement
Economic value- added (EVA) is a residual income, introduced to improve the internal and external performance of the business. The task of managers is to capitalize on the wealth of shareholders, by well-organized distribution of resources. The information in the financial statement helps the managers and shareholders to evaluate the present as well as future performance of the firm.
3 pages (750 words) Research Paper
Application of Financial Statement
It records the business revenues and the operating expenses of a business for a given duration. It is among the most basic records needed by bankers, investors and vendors before making crucial decisions, and can also be applied in real life. All people use accounting statements in their daily life.
3 pages (750 words) Term Paper
Question: Using the statement of accounts and published performance information for two companies of your choice operating i
Shareholders require information on the company’s profitability. Shareholders are compensated through dividends and share price growth. The more profitable a company, the more will be its potential dividends and share price growth. During the accounting period ending 2012, Marks and Spencer performed very well and created enough value for its shareholders.
4 pages (1000 words) Essay
Statement of Smith Ltd
Company Analysis More than often, liquidity ratio indicates the profitability measure effectiveness and efficiency of the firm’s performance. As a result, the liquidity ratios are an area of main interest to creditors and investors as it determines the overall liquidity of a company in terms of business short-term solvency thus, its ability to pay back its debts as it runs its business operations.
2 pages (500 words) Essay
Financial statement analysis
The company was established in 1777 by Bass Williams with its headquarters based in Denham in UK. The International hotel group operates in hotel industry and offers hospitality services to its customers (Intercontinental Hotel Group, 2013). The company reported a net income of 460 million dollars as at 2011 and a net operating income of 1,768 million dollars in the same period (Intercontinental Hotel Group, 2013).
6 pages (1500 words) Assignment
Management acounting
Sales price variance = (15.0 – 14.5) ? 2,100 =?1,050.0 (A) W4. Material M3 price variance = (1.55 ?1,050) – 1,680 =?52.5 (A) W5. Material M3 usage variance = ((2,100 ?0.6) – 1,050) ? 1.55 =?325.5 (F) W6. Material M7 price variance = (1.75 ?1,470) – 2,793 = ?
4 pages (1000 words) Essay
Choose one IAS or IFRS and explain: 1.The background to the issuing of the standard (this should include what problem or difficulty the standard was trying to solve); 2. Whether there were any controversies surrounding the accounting principles/practi
For instance, the IASB (international accounting standards board) was formed out of a desire to create an independent accounting standard that can be utilized as a baseline of understanding for the way in which financial transactions and accounting for these can be
4 pages (1000 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email