HND财政预算reportWord文件下载.docx
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HND财政预算reportWord文件下载.docx
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Tosumup,thecompany'
sactualspendingismuchhigherthanthestandardspending,inordertochangethissituation,ithassomerecoomendationforTricolplc.
●Improvethelabourefficiencymaybeagoodsolutionfortheadversesituation.Becausethevarianceofdirectlabourismainproblem,andtheemployeesspendmuchmoretimetoproduceaproduct.Asaresultthiscompanycanprovidesometrainingclassesforthemtoimprovetheirskillandknowledgeaboutusingupgradedmachinesandmaterials,thentheycanoperatethenewmachinerieseasilytosavethetimeandmoney.
●Useinferiorqualitymaterials.Becausethehighpriceofthehighqualitymaterialwillleadthiscompanycannotachievethetargetstandardforthedifficulttradecondition,whichmayresultinalargenumberofstocksandthenthecashflowwillappearedsomeproblemtoo.
●Reducelabourrate,thiscompanycanemploysomelowergradeworkforce,sothiscompanycanpayalowersalary,andmakeaplanforovertime.Alsothecompanycanprovidesomemotivationsystemtomotivatethestaffwhoareworkhardandtheworkenthusiasticofthestaffwillincrease.
Beforecalculatetheanswerweshouldsupposetheperiodofthisprojectisfiveyearsandithasnoothercashflowsexceptthis.Thenwedonotneedtoconsidertheexchangeofthematerialsandthetaxationfromgovernment.Herebelow,itwillgettheanswerintwomethods.
6.Analysisoftwoinvestmentappraisaltechnique
Assumption
Duringtheprocessofusingnetpresentvalueandthepaybackperiodmethod,theassumptionshouldbetakenintoconsideration,sothatwecaneasilytounderstandtheunderlyingprinciple.
Theassumptionisasfollows:
●Thelifeofthisinvestmentiswithinfiveyears
●Thereisnootherincomeorexpenditureintheinvestmentprojects
●Theinflationanddeflationdoesn’texist,andthereisnochangeinexchangerate
●Taxationbygovernmentcanbeexcluded
●Allthemarketfactorsarestable
●Uncertaintydoesnotexist.
●Theappropriatediscountratetouseisknown,toavoidunnecessarycalculations,whenundertakingDCFquestions,thediscountrateshavebeencomputedforyouandaregiveninthediscounttablesprovidedattheendofthisunit.
●Unlimitedfundscanberaisedatacompetitiverate.
7.Calculationofnetpresentvalue
ItisshowedbyAppendix3.
8.Calculationofthepaybackperiodmethod
ItisshowedbyAppendix4.
9.Recommendationforinvestmentdecision
Theanalysisoftwoinvestmentappraisaltechniques
Disadvantagesofthepaybackmethod
·
Itignorescashflowsafterinitialoutflowhasbeenmet
Itignoresrisk
Itignorestimevalueofmoney
Itignoresthefactthatbenefitsfromdifferentprojectsmayaccrueatanunevenrate
Noallowanceismadeforinterestontheinitialcapitalinvestment.
AdvantagesoftheNPVmethod
Providesanobjectivebasisforevaluatingandselectinginvestmentprojects
Takesaccountofbothmagnitudeandtimingofexpectedcashflowsineachperiodofaproject’slife
Investorscannotuseasingleformulatocalculatetherateofreturn,theyshouldconsiderthevalueofthetime.
Inviewofthedatacalculatedabove,paybackwilltakefouryearsandone-and-halfmonthtocomplete,therefore,itseemstobereasonabletoacceptandinvestthiskindofproject.However,inothermethod,itisimpossibletofulfillarequirementofa10%return.Theactualrateofreturnmustbelessthan10%.
Takingthistwomethodsintoconsideration,firstly,netpresentvaluemethodsismoreaccuratethanpaybackperiodmethod,secondly,althoughitcannotrealizetheexpectedreturnin10%inthefirst5years,mainlybasingongrowingslowlyandlowreturnatbeginning,itmaybringahigherrevenueandpositivecashinflowinthefutureyears.
Personally,Ithinkwecanacceptthenewprojectforaperiodtime.
10.Considerationofotherfactorsthatmanagementshouldconsider
1.Theinvestor’sbeliefinthefuture,basedonforecastsofinternalandexternalfactors.
2.Whetherthecapitalissufficientornot.Ifnot,thecostofcapitalfinancewillinfluencethenetpresentvalue.
3.Theinvestor’sattitudetorisk,Theprofitoflongtermmaybemorepositive.
4.Thecostofhumanresourcemanagementshouldbeconsidered.Becausetheprojectofdistributionarmneedpurchaseofseveralnewmotorvehicles,andthisneedemployeetrainingarrangementandnewdepartmentestablished.
11.Conclusion
Asanadvisorforthecompany,thisreportcanhelpthecompanymaketheflexbudgetandvariancesandusethetwomethodstoanalysistheinvestmentandhelpthecompanychoosetheinvestmentmethod.Thiswillcompanymakemuchprofit.
Appendix1
TricolPlcFlexedbudged
Basedontheallinformationabout“Zupper”expendabletable,Idrawatableasfollowing:
TricolPLCFlexedBudget
forJune2009
Originalbudget2000units
Flexedbudget1600units
Actualresults1600units
VarianceF/A
£
Directmaterial
80000
64000
61600
2400F
Directlabour
36000
28800
35200
6400A
Variableproductionoverheads
4000
3200
Insurance
2200
2400
200A
Depreciation
1500
RentandRates
2500
AdministrationOverheads
2000
Total
104200
108600
4400A
Appendix2
Thecalculationofthevariancesandthevariancerate
1.Directmaterialtotalvariance
(standardunitsofactualproduction×
standardprice)–(actualquantity×
actualprice)
[(4kg×
1600)×
£10]–£61600
=£64000–£61600
=£2400(F)
Theratefordirectmaterialtotalvariancesis£
2,400/£
64,000×
100%=3.75%
2.Directmaterialpricevariance
actualquantity×
(standardprice-actualprice)
=5600kg×
(£10-£11)
£1
=5600(A)
Therateofdirectmaterialpricevarianceis£
5,600/£
100%=8.75%
3.Directmaterialusagevariance
standardprice×
(standardunitsofactualproduction-actualunits)
=£10×
(4kg×
1600-5600kg)
800kg
=£8000(F)
Therateofdirectmaterialusagevarianceis£
8,000/£
100%=12.5%
Note:
Whenaddingthepriceandusagevariancestheresultmustequalthetotalvariance.Therefore,£5600(A)(price)+£8000(F)(usage)=£2400(F)(total).
4.Directlabourtotalvariance
(standardhoursofactualproduction×
standardrateph)-(actualhours×
actual
rateph)
[(2h×
£9]-(3520h×
£10)
=(3200h×
£9)-£35200
=£28800-£35200
=£6400(A)
Therateofdiretclabourvarianceis6400/28800×
100%=22.2%
5.Directlabourratevariance
actualhours×
(standardrateph-actualrateph)
3520h×
(£9-£10)
=3520h×
=£3520(A)
Therateofdirectlabourratevarianceis£
3,520/£
28,800×
100%=12.2%
6.Directlabourefficiencyvariance
standardrateph×
(standardhoursofactualproduction-
actualhours)
£9×
[2h×
1600-3520h]
=£9×
(3200h-3520h)
320h
=£2880(A)
Therateofdirectlabourefficiencyvarianceis£
2,880/£
28,000×
100%=10%
Whenaddingrateandefficiencyvariancestheresultmustequalthetotalvariance.Therefore,£3520(A)(rate)+£2880(A)(efficiency)=£6400(A)(total).
7.Overheadtotalvariance
(standardinsurancecost-actualinsurancecost)+(standardadministration
overheads-actualadministrationoverheads)
(£2200-£2400)+(£2000-£2200)
=£200(A)+£200(A)
=£400(A)
Therateofoverheadtotalvarianceis£
400/£
4,200×
10
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