sqahnd财政预算34.docx

sqahnd财政预算34.docx

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sqahnd财政预算34

Contents

1.0Introduction

Thisreportwilldividedintotwoparts.PartAandPartB.InPartA,Firstofall,Iwillprepareaflexedbudgetinlinewithactualactivity.Second,thiswillincludingtheMaterialsvariances,Labourvariancesandtotaloverhead.Atthesametime,Iwillidentifyaminimumofonepossiblecauseoftheeachvariance.Finally,accordingtodataanalysis,therehavebeensomerecommendationstomanagementofMatteckPLC.InPartB,ItwillhavefourdifferentwaystoevaluatefinancialperformanceandgiverecommendationsforMatteckPLC.ThesewaysareARR,Payback,NPVandIRR.

PartA

2.0Theflexedbudget

ForFlexbudgedofMatteckPLC,wecanseetheAppendix1.

3.0CalculatetheMaterialsvariances,LabourvariancesandtheTotaloverhead.

3.1Directthematerialsvariances,labourvariancesandthetotaloverhead.

ThissectionshowstheAppendix2.

3.2Varianceanalysis.

Materialpricevariance:

Thematerialpricevarianceis₤32,000（F）.Accordingtothedataanalysis,itis₤2/kglessexpensivethanplanned.Thepossiblereasonscanbedividedintothreepoints:

first,theycouldreplacerawmaterials,usingalower-gradematerial.Second,thesuppliertoprovidesomediscountforthisbatchofrawmaterials.Finally,learnfromthecase,thecompanyhasmanagedtolocatenewmaterialsfromanoverseas.Duetotheproductfromoverseas,accordingtodifferentexchangerate,thematerialwillreducetheprice.

Materialusagevariance:

Thematerialusagevarianceis₤30,000（A）.Thepossiblereasonsincludetheeffectsofrawmaterialsandtheinfluenceofthemachine.Ifthecompanyusingpoorqualityrawmaterials,itmaybemoredifficulttowork.Thiswillincreasethewastematerials.Atthesametime,thecaseshowsthatthecompany'snewmachinerycanbefullyusedinthesecondweek.Thedelaytimemayhavecausedthemachinetousemorematerialsthanplanned.

Materialtotalvariance:

Thematerialtotalvarianceis2,000（F）.Caseshowsthatthecompany'srawmaterialsarefromoverseassuppliers.Thiswillreducesomecosts.Whichleadstothematerialpricevarianceis32,000（F）.Ontheotherhand,thecompanyhasintroducedanewmachine,theinfluenceofmachineinstalledtime,causedsomewastedofmaterials.Thismakesthematerialusagevarianceis₤30000（A）.EvenifThecompany’smaterialtotalvarianceis2000（F）.Thecompany'smanagementstillshouldpayattentiontoTheutilizationofrawmaterials.

Labourefficiencyvariance:

TheLabourefficiencyvarianceis10,000（F）.Thepossiblereasonscouldincludethenewmachinetoimprovestaffworkefficiency.Usingnewmachinecanlesslabourhours.Atthesametime,thecaseshowsthatthecompanyhashadtoemploymorehighlyqualifiedstaff.Theycanincreasetheworkingefficientlythroughthehigherskill.

LabourRateVariance:

TheLabourratevarianceis15,000（A）.Throughthecalculation,thelabourrateis₤1.50perhourhigherthanoriginal.Thepossiblereasonsis₤1.50perhourhigherthanplanned.Thecostofdirectlabourisadversenessforthisfirm.

LabourTotalVariance:

theLabourtotalvarianceis5,000（A）.Thereasonsofvariance,thecompanyhasintroducedthenewmachine,Astheresultthedirectlaborefficiencyvarianceisfavorablewhichis10,000（F）.Onotherhand,thelabourrateishigherthanstandardlabourrate.Finally,leadtothelabourtotalvarianceisadverse,

4.0Therecommendationsformanagement（variances）.

1.Thecompanyshouldbehadavarietyofdatainvestigationtosetupcompletedatasystem.Atthesametime,throughthedifferentvariance,thecompanycanknowmoreaboutthemarketinformation.

2.Thecompanyshouldintensifytheperformancemonitorforstaffbecausethelowerperformancewillacceleratewasteofmaterialandthenleadtothematerialusageisincrease,theperformancemonitorcanhelpthecompanyshrinkthevariance.

3.Management:

thecompanycanprovidesomemotivationpoliciestomotivatethestaffthatisworkhardandenhancetheworkenthusiasticofthestaff.Thiscanimprovethestaffworkefficiency.

PartB

5.0Usingfourdifferentmethodstoevaluatethefinancial.

5.1Identifytheaccountingrateofreturn.

ARR

Averageprofit=

=660,000

Accountingrateofreturn=

=26.4%

Thecasesshowthatthecompanyshouldhaveanaccountingrateofreturnofatleast15%,throughcalculation,theARRis26.4%.Therefore,thedatahasmeetcompanystandards.

5.2Identifythepayback.

Thecompanyhopestorecoverthecostoftheinvestmentwithin4fouryears.Infact,theyjustuse3years341days.（seeAppendix3.）

5.3IdentifytheNetpresentvalue.

TheNPVmethodcalculatesthepresentvaluesofcashinflowsandoutflowsandestablisheswhether.Basically,NPVprovidesanobjectiveforevaluatingandselectinginvestmentprojects.Moreover,ittakesintoaccountrequ