Accounting for Managers: Interpreting accounting information for decision-making
INTERPRETING FINANCIAL STATEMENTS 97 and customers, but for political power and institutional legitimacy, for social as well as ...
98 ACCOUNTING FOR MANAGERS Table 7.11 Carrington Printers’ Balance Sheet Fixed assets Land and buildings at cost less depreciati ...
INTERPRETING FINANCIAL STATEMENTS 99 The liquidators found, as is common in failed companies, that the values in the Balance She ...
100 ACCOUNTING FOR MANAGERS to distract attention from poor performance; or maintaining or boosting share prices (Gowthorpe and ...
INTERPRETING FINANCIAL STATEMENTS 101 Consequently, the following chapters are concerned with the disaggregated (to business uni ...
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8 Marketing Decisions.................................... This chapter considers the use of accounting information in making mar ...
104 ACCOUNTING FOR MANAGERS include the professionalism, courtesy, reliability and responsiveness of staff. Image drivers reflec ...
MARKETING DECISIONS 105 Cost behaviour Marketing decisions cannot be made in isolation from knowledge of the costs of the busine ...
106 ACCOUNTING FOR MANAGERS costshave both fixed and variable components. A simple example is a telephone bill, which will have ...
MARKETING DECISIONS 107 In mathematical terms, this is: N=Pu−(F+Bu) where: N=net profit u=number of units sold P=selling price p ...
108 ACCOUNTING FOR MANAGERS to solve the above equation for u (the number of units) where N (net profit) is 0, as follows: 0 =Pu ...
MARKETING DECISIONS 109 This is equivalent to the sales in units of 35,000 at £20 selling price per unit. However, if the busine ...
110 ACCOUNTING FOR MANAGERS Using the same example, the margin of safety assuming anticipated sales of 25,000 units is: 25 , 000 ...
MARKETING DECISIONS 111 Despite its limitations, CVP analysis is a useful tool in making decisions about pricing and volume, bas ...
112 ACCOUNTING FOR MANAGERS The actual mark-up used may be based on a ratio (see Chapter 7) such as return on sales (as in the a ...
MARKETING DECISIONS 113 Table 8.2 XYZ Ltd – contribution atdifferent activity levels Selling price per unit Volume expected at g ...
114 ACCOUNTING FOR MANAGERS £’000 Revenue 17,000 @ £30 510 3,000 @ £12 36 546 Variable costs 20,000 @ £10 200 Contribution 346 F ...
MARKETING DECISIONS 115 1 The future selling price may be affected by accepting a special order, if competi- tors adopt similar ...
116 ACCOUNTING FOR MANAGERS Market segmentsmay be defined geographically, by customer or by customer groups, by product/service ...
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