Making Managerial Decision

To: Senior Management aggroup From: Gerald White and Accounting Team run across: Subject: A report aggrandise an analysis of bes and recommendations for Omar caravanserais prospective sight, any strategical implications of recommendations made and practicable benefits of considering alternative wooing theories and models. 1. Analysis of cost and Recommendations 1.1 Analysis of Costings below various methods In Appendices 1, 2, 3 and 4 is a spreadsheet detailing the data for Fast Clean Products stream achievement, absorption be and marginal cost for current production and the prospective caravan inn nine, and division calculations for the prospective order. In this report we ordain be dealing with the bonnie figures as the actual order figures may vary by 2%. The figures for every(prenominal) possibilities can be found in the Appendices. 1.1.1 concentration Costing The average total cost of the Khan order under absorption cost is £ 446,107.82. 1.1.2 peripheral Costing The average cost of the Khan order under marginal costing is £300,000.00. 1.1.3 Contribution Costing The division generated by the order is mensurable using various profit loading percentages including 10%, which is shortly in use at Fast Clean Products. The contribution at this price is £190,718.

66 but changes with the price pile which will be discussed later. 1.2 Suitability of costing methods for the order In this section, the suitability of for each one costing method, with regard to the trouble ending as to whether or not take on the Khan special order, is discussed. 1.2.1 Absorption Costing Absorption costing would be suitable for use as the method includes ! all cost of production which makes it useful for price decisions. This is important in this case with Khan owning a string of supermarkets which compete intensely on costs. However, only variable costs are relevant for a special order decision suggesting that marginal costing may be more relevant at the current...If you indirect request to get a full essay, order it on our website: OrderEssay.net

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