Jet 2 Task 2

In: Business and Management

Submitted By loolilly321
Words 1345
Pages 6
A budget is a comprehensive plan given in a quantitative term that directs where resources will be acquired and spent in a given period. It is a financial document which operates on income and expense basis. This document depends on the balancing of the monthly or yearly income and expenses. In this case, plan is used as the controller of what is going to happen while budget assess the performance of the required project. The meaning of setting a budget is to provide direction, improves efficiency, control finances and assign responsibilities to evaluate the business plans. Budgets are used by managers as s benchmark to measure up to the results of the definite operation.

Budgetary areas that raise concern in the budget planning

There were budgetary areas that raised an alarm in the budget planning of the Competition Bikes, Inc. one of the leading area was the forecasting of the transaction budget. The year 9 sale projection set at 3510. There a big is the difference in units of year 8 compared to year 7 with a decrease of 15% levels. Keeping in mind the current economic imbalance, the projected sales reading 3510 do not call for any support. This cannot happen because the professional rider’s sponsorship is at decline and is expected to undergo the same situation for another three years. These steps do not make sense at all and continuation of the support without the clear discussions and understanding on the way forward to increase sponsorship will no doubt lead to decline market (William et al, 1975
[pic]
The budget does not reflect the quarterly breakdown as proposed earlier on the master plan. The management does not take keen consideration on the purchase of the seasonal activity materials. This is a failure to meet the requirements of a biking competition which is an outdoor sport taking place throughout the year. The company should consider proper…...

Similar Documents

Jet 2

...properly measuring the rider and placing the order with the factory. Some distributors allow their bicycle shop retail outlet clients to do their own measurements but the distributor is contractually committed to the order once it is placed. The factory constructs the bike frame according to these measurements and adds the approved braking, gearing, and other miscellaneous components as specified in the order. Each bike is completely built at the factory. Quality control checks are conducted, and each new bike is test ridden to fully check all functional attributes of the product prior to shipment to the distribution network. MANUFACTURING COSTS CarbonLite Production Standards Direct materials: Each bike frame requires an average of 42 (2 as a production scrap allowance) carbon strips which cost $9/strip. The component package costs $275. Direct Labor: Each bike requires a total of 15 hours of direct labor. The average $20 labor costs are relatively high due to the high skill level required in manufacturing the product. Retention of the quality labor force has not been a problem. Variable Manufacturing Overhead: Variable manufacturing overhead is currently applied at $94.529/unit. PRODUCT SALES AND THE MARKET Sales Summary – last three years Company Sales in Units Model Sales Price Trade Current Last Discount to Year - 2008 Year - 2007 Distributors CarbonLite $2990 50% 3400 4000 Two Years Ago - 2006 3000 Sales Forecast: Global Economic Impact Competition Bikes,......

Words: 3636 - Pages: 15

Task 2

...Course Project Part II Introduction You will assume that you still work as a financial analyst for AirJet Best Parts, Inc. The company is considering a capital investment in a new machine and you are in charge of making a recommendation on the purchase based on (1) a given rate of return of 15% (Task 4) and (2) the firm’s cost of capital (Task 5). Task 4. Capital Budgeting for a New Machine A few months have now passed and AirJet Best Parts, Inc. is considering the purchase on a new machine that will increase the production of a special component significantly. The anticipated cash flows for the project are as follows: Year 1 $1,100,000 Year 2 $1,450,000 Year 3 $1,300,000 Year 4 $950,000 You have now been tasked with providing a recommendation for the project based on the results of a Net Present Value Analysis. Assuming that the required rate of return is 15% and the initial cost of the machine is $3,000,000. 1. What is the project’s IRR? (10 pts) 22.38% 2. What is the project’s NPV? (15 pts) NPV = (1,100,000/1.15) + (1,450,000/1.15)^2 + (1,300,000/1.15)^3 +(950,000/1.15) ^ 4 – 3,000,000 = $450,866.74 3. Should the company accept this project and why (or why not)? (5 pts) In looking at the overall analysis of the project, I believe it would be beneficial to accept the project because, the projects (IRR) Internal Rate Return are greater than the (RRR) Required Rate of Return and the overall (NPV) Net Present Value is positive meaning the value......

Words: 353 - Pages: 2

Jet 2 Task 2

...than $50,000 in this area than the previous year. I would suggest that the budgeted amount be somewhere between the year 7 & 8 amounts, given the positive prediction that sales will increase, which would put it between $1273867 and $1322075. This over statement in this category has also led to the company to under budget their Operating Income which they have budgeted at $80585. With the prediction of selling more units than year 8, the company should be budgeting a higher Operating Income than the previous year’s amount of $97,533. They definitely should not be indicating that they will be selling more but making less. This would be a bad financial sign for the company, as it is showing a lack of leadership and management skills. 2. No budget can be perfect, so keeping this in mind; one would expect variances to be present within the flexible budget. The variances found within this flexible budget, however, seem to highlight the flaws that were noticed and explained above. The first variance that is displayed is the unfavorable variance of $130,065.00 in Net Sales. This is due to the fact that the company sold 3423 units, not the 3510 that was placed in the budget. The variance is considered unfavorable, as the company did not make as much in net sales as it had budgeted for. The positive side for the company is that it did, in fact, turn around the negative sales trend that existed between years 7 & 8. The next variance comes in Direct Materials. ......

Words: 1118 - Pages: 5

Task 2

... and might then retain a copy of the assignment on its database for the purpose of future plagiarism checking. Requirements Modelling Report for the Sales & Book Tracking System Prepared for: Pinnacle Publishing Company 20th December, 2011 Prepared by: |Name |Student No. | | | | | | | | | | | | | KXO221 Assignment 3 Table of Contents Executive Summary 1 Introduction 2 1 Required Functions of the Sales & Book Tracking System 3 2 Functional Decomposition Diagram 4 3 Data Flow Diagram – Context 5 4 Data Flow Diagram – Level 0 6 5. Data Flow Diagram – Level 1 8 6. Data Dictionaries 10 6.1 Data Dictionary – Processes 10 6.2 Data Dictionary - Data flows 11 6.3 Data Dictionary - Data Stores 15 7. Entity Relationship Diagram 16 8 Use Case Diagram 18 9. Conclusion 20 References 21 Executive Summary Considering the current situation and management’s requirements, our group analyzed the Pinnacle Publisher’s business process and the communication of data, and then a model of new system was designed. This requirement modeling report aims to present a general understanding......

Words: 3520 - Pages: 15

Financial Analysis: Jet 2 Task 4

...JET2 – Task 4 Financial Statement Analysis Managing Internal Cost & Controlling Finances Summary Report In response to a request from the Vice President of Competition Bikes for an analysis and recommendation regarding Activity Base Costing, as well as a request for a break-even analysis with projections of the company’s target profit, I have developed the following report. 1. Costing Method Evaluation Traditional Costing and Activity Based Costing (ABC) are the two systems we will evaluate in relation to Competition Bikes’ operations. To do so, we will need to look at the advantages and disadvantages of both systems. Costing systems are used to help predict the profitability of a product and help establish the cost of a product correlated to the income it generates. Traditional costing allocates overhead according to the amount of a particular cost driver, for example, how many direct labor hours are required to manufacture a product, while activity based costing looks at each activity and assigns a cost to it. Traditional costing separates costs into direct and indirect categories. The costs of labor or of raw materials would be examples of direct costs. Then, traditional costing divides the total cost of a product by the direct labor cost. This gives us the estimated cost of the product per item. However, increasingly in today’s business environment, the proportion of direct costs have fallen in relation to the......

Words: 3145 - Pages: 13

Jet 2

...Diverse Groups Dave Park Leadership is important in managing and organizing the structure of the organization while trying to maintain a profitable company that takes into consideration employees, shareholders, customers and board of directors, etc. Another attribute of a great leader is managing diversity in the workplace. However, diversity includes many different issues and needs to be managed and if done properly can lead to competitive advantages for the company. Thomas A. Kochan, professor at MIT, stated “Diversity can enhance business performance only if the proper training is provided and the organizational culture supports diversity (Dubrin, 2010). Managing Cultural Diversity: Managing cultural diversity is not an easy task, however, when incorporated into the organizations core values, is makes it easier to incorporate (Dubrin, 2010). Below is a diagram that provides a breakdown of areas or issues that may need to be looked at to evaluate the possibility of creating and leading a culturally diverse organization. These areas may help to identify areas where a competitive advantage may be available in the organization. In such a culturally diverse world and as the organization makes decisions that will impact them globally, these discussions are vital for the success of the company. Whether not decisions are made to implement or not to implement decisions based on diversity within the organization, these ideas, may identify some of the organizations......

Words: 1255 - Pages: 6

Jet 2 Task 1

...liabilities. A strength for the company. Retain Earnings: An increase in Retained Earnings was reported this year. The balance sheet shows an increase of 2.7% (or $31,286). An increase in Retained Earnings is expected since we also saw an increase in Cash Equivalents (a strength). This increase also reveals that no dividends have been paid out to stockholders for the year. This is to be expected during years of decline, but it should be an item of concern since no dividends were paid during years 6 and 7 as well. Total Assets: Total Assets declined slightly from $4,293,044 to $4,285,831 (.2% decline). Depreciation was only increased by 50% this year compared to 100% last year (a strength). This shows that us that the double-decline balancing method is used by this company. This 50% reduction along with with the slight increase in capital expenditures is the reason for the .2% decline in Total Assets. Management show put focus on how to reduce Capital Expenditures since this is an item that they can control. Summary Even though this was not a prosperous year for Competition Bike’s, they do show signs of prosperity. The continued decline of Long-Term Liabilities is proof of that. Management should pay special attention in managing Cash Equivalents and Capital Expenditures to show stockholders that Competition Bike’s knows how to manage money and reduce costs. By taking care of the two items mention above, Competition Bikes Income and Balance Sheet so......

Words: 8250 - Pages: 33

Jet 2 Task 2

...Rachel Johnson Addy JET Task 2 March 29, 2014 JET Task 2 1. A budget is an itemized estimate of expected income as well as estimated expenses over a specified period of time. The reason to design a budget is to regulate spending. There are multiple causes of concern with Competition Bikes budget plan. The main cause for concern is that the sales estimated for year 9 is 3,510 units. This estimate is not supported by past sales data. Due to the current economic status, the amount of units sold from year 7 to 8 decreased 15% according to the horizontal analysis. Rider sponsorships were also reduced and will most likely remain limited in the future (WGU, 2014). There is some misleading and inaccurate information posted within the budget. Under the Selling, General, and Administrative breakdown “utilities” is listed at $150,000 on the vertical analysis for year 8 and year 9. Then there is another listing for “utilities and services” of $54,000. This is misleading because this entry was not listed in the expenses from the previous year. Another cause of concern is that the cash budget is not included in the uncollected receivables. CB makes expensive bikes so there should be room for uncollectable accounts. The uncollectable receivables budget could be used to cover the any uncollected payments. The reduction of sponsorships and the slow economy could possibly cause a rise in uncollectable accounts. There is also some concern because the operating income is......

Words: 1749 - Pages: 7

Jet 2 Task 1

...working capital can be tricky, because you want to have balance not too much or too little a healthy ratio would be 1.2 to 2.0. A weak working capital would be less than 1 would be considers a negative and more than 2 is improper investment of assets. Competition Bikes working capital is $1,275,631 or a 5.24 ratio yr. 8, $1,119,344 or a 5.78 ratio yr. 7, and 924,223 or 9.79 ratio yr. 6. As a result they have an excess working capital. They have managed to decrease the capital from a 9.79 ratio to a 5.24 ratio over that 3 year period. Competition Bikes is moving in the right direction but still has many changes that should be made to have a healthy working capital. Working capital can be improved by utilizing Just in Time (JIT) production. JIT is where a company on produces inventory that is need to avoid holding inventory. Inventory cost including raw material and finished good inventory can be controlled with JIT. Managing production could be helped with the use of inventory management software. Improving the accounts receivable collection times would improve the working capital. They are currently making collections in 43.8 day. They should make changes to the collections policy to when it allows them to make collects in 30 days. They could bill the client 2 times a month 15 days apart and payment would be due 15 days after the invoice date. Billing in this manner will allow Competition Bikes to received payment in 30 days or less. Competition Bikes has excessive......

Words: 4327 - Pages: 18

Jet Task 2

...deviation or try and prevent it from happening again. The criteria I am using for my management by exception standard is any variance over $5,000 will be investigated because at that rate each variance would equal about 5% or more of what the operating income was for year 9. The time and motion standard will be used in investigating these variance. This standard determines how long it should take each step to be performed by each laborer and how much machinery and direct labor is needed to complete a product. The first variance that meets this criteria is direct labor cost. These cost were $100,000 more than anticipated so this variance would definitely need to be investigated to see what went wrong and why more labor was needed to perform task than anticipated. Manufacturing overhead costs also meets the MBE criteria with an overage of $26,426 which leaves a big impact on the company’s ending contribution margin. Another variance that meets the criteria are the transportation out costs. All of these variances impacts the company’s bottom line, contribution margin, operating income and in the end its profits. References Management by exception - Wikipedia, the free encyclopedia. (n.d.). Retrieved April 24, 2014, from http://en.wikipedia.org/wiki/Management_by_exception What is a flexible budget variance? - Questions & Answers - AccountingTools. (n.d.). Retrieved from http://www.accountingtools.com/questions-and-answers/what-is-a-flexible-budget-variance.html...

Words: 2148 - Pages: 9

Jet 2 Task 1

...Financial Analysis Summary Report Task 1 Competition Bikes Incorporated Lisa A Castro, MSW Western Governors University Horizontal Analysis (A. 1. a) A horizontal analysis can be defined as “the study of percentage changes in comparative statements” (Charles T. Horngren, 2008, p. 746). It is useful in determining a company’s financial stability. This section will analyze Competition Bikes Incorporated’s (CBI) percentage changes from years 6 to 7 and then 7 to 8. The report will include an analysis of CBI’s comparative income statement and balance sheet. Between years 6 and 7 CBI’s Net Sales increased by 33.3% for a change of $1,495,000. The increase of 33% indicates strength for the company because it means that the company has become more profitable. This also indicates that demand for CBI’s product has increased and that their marketing strategies have been more successful. It is good news for the shareholders because more profits means more revenue. Between years 6 and 7 CBI’s Cost of Goods Sold increased by 31.8% for a change of $1,048,000. Even though the Cost of Good Sold increased significantly it is still less than the Net Sales increase of 33.3%. This resulted in a Gross Profit of 37.5% or $447,000. This indicates strength for CBI, as the management was able to control their costs to turn a profit on the increased sales. This is also a positive for the shareholders because increased profits mean more revenue for the shareholders.......

Words: 6540 - Pages: 27

Financial Analysis Jet Task 2

...Requirements for Task 1: A Prepare a summary report in which you do the following: 1) Evaluate the company’s operational strengths and weaknesses based on the following: a) Review the horizontal analysis, analyze the results, and discuss operational areas of concern. “Horizontal analysis of financial statements involves comparison of a financial ratio, a benchmark, or a line item over a number of accounting periods. This method of analysis is also known as trend analysis. Horizontal analysis allows the assessment of relative changes in different items over time. It also indicates the behavior of revenues, expenses, and other line items of financial statements over the course of time.” (Ready Ratios, 2014a) The sections below summarize the results of my horizontal analysis of Competition Bikes, Inc. (CB): Year 7 to Year 8 CB suffered a decrease in Net Sales Revenue of 15% from Year 7 to Year 8, but the course materials explained this as a result of a decline in the overall economy. This is a reasonable explanation and may very well indicate that CB management’s actions or inactions are not to blame for decline. It is encouraging that percentage decreases in Cost of Goods Sold and Selling Expenses, 14.5% and 14.9%, respectively, approximated the 15% decrease in Net Sales indicating no significant change in marginal cost of production and sales. That total General and Administrative Expenses increased by 1.2% is not any cause......

Words: 10434 - Pages: 42

Unit 2 Task 2

...system T3. Tills A till is cash register or drawer for money in a shop, bank, or restaurant. Retailers Argos use this to put money in and take out change. T5. CCTV Argos use CCTV to signal a specific place in there store. It is also used to record everything that happens in the store. CCTV is protected by making sure the cameras are in working order. It is maintained by engineers. C) The important of each of these resources in achieving organisational goals , The goals for Argos are the following : P1 The purpose and importance of having equipment at Argos in terms of accomplishing their organisation goals so then they have something they can use to help them finish and achieve given tasks and goals. This leads to them making profit because they are achieving given tasks which means they are selling P2 Premises is something very Crucial for Argos because they need somewhere to physically operate and work from, this will help them reach their organisational goals as they are making sales and profit P3. Shelves are very important to Argos as they need somewhere to put products and equipment on as they are being sold on , this helps them in achieving their organisational goals as they have somewhere physically to put their products which will lead them to making and generating sales P4. The importance of having a forklift for Argos in terms of achieving their goals is so that they will have something that will allow them to move multiple and......

Words: 910 - Pages: 4

Aft 2 Task 2

...| Accreditation Audit: AFT Task Two | Stephanie Clements | | | Western Governor’s University | | Sentinel Event A sentinel event is defined by The Joint Commission as an unexpected occurrence involving death or serious physical or psychological injury, or the risk thereof (Joint Commission, 2015). The event described in the case study is a sentinel event resulting in the abduction of a child. The event begins when a child is admitted to the preop unit for outpatient surgery with her mother. The child’s mother leaves the facility during the procedure, giving instructions for the nurse to call the mother if the procedure was quicker than expected. After the procedure, the child is discharged home by the recovery room staff with her estranged father who does not have custody of the child. The child is recovered by law enforcement in the care of the father, but the potential harm and psychological damage ensued categorizes these happenings as a sentinel event. Personnel/ Personnel Issues There were several people involved in this sentinel event at Nightingale Community Hospital. Here, they are listed along with their roles and any issues involving them in this event: Person | Role in the event | Barriers | Registrar, Katie Jessup | Responsible for initial intake information and consent to treat. | Followed process as outlined. Knowledge of potential information gaps and custodial issues with children could provoke further questioning. Lack of......

Words: 1742 - Pages: 7

Amt 2 Task 2

...Community Health Needs Assessment Trinity Community Hospital AMT Task 2 Community Health Needs Assessment Trinity Community Hospital conducted a community health needs assessment (CHNA) to identify the needs of the local population. The assessment focused on oncology, orthopedic, and cardiovascular services. The following report will analyze the community health needs assessment by identifying the major risk factors in the community, and discussing if the needs defined in the evaluation are being addressed. The report will also outline recommendations for any outstanding community needs. Major Risk Factors Oncology Services The community health needs assessment identified that new cancer cases are expected to increase by 34% due to the aging population that will be over 65 within the next five years and a rise in expectation of men and women developing cancer. The assessment also identified that the current services are already stressed.; physician practices are at capacity, facilities and equipment are not keeping pace with the patient volume, services are fragmented, and there is little emphasis on prevention education and control. Orthopedic Services Another risk factor for the community is the sharp increase in the need for orthopedic services forecasted over the next five years. The need for orthopedic procedures in the next five years are expected to increase by 46%, inpatient joint and spine cases will increase by 30%, and outpatient spine and......

Words: 873 - Pages: 4

Télécharger La Saison Complète | Unmanned Aerial Vehicle and Stealth Spy Drone | Lloyd in Space