Finance for Managers Essay

876 Words May 11th, 2015 4 Pages
Unit 4.9 Level 4

Finance for Managers 15 Credits

Sample Assignments

You are employed in a financial consultancy and one of your clients is a relatively new company that is facing rapid growth. As they began as a small family business, they have not had the level of financial control that would be expected in a business of their current size. The management team are looking to employ an accountant. Before taking this step they need to understand the reasons for recording and reporting financial information, the legal responsibilities they have in this respect and the usefulness of financial information. They also require some specific help in relation to working capital and in respect of a new project which they are
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Actual output was 1,100 units which were sold for £69,900. The actual production costs were: £ Direct labour (1075 hours) Direct materials (1175 kg) 24,420 23,260

Fixed overheads 6,400 There were no inventories at the start or the end of the month. You are required to calculate the variances for the month from the available information, and use them to reconcile the budgeted and actual profit figures. You should produce a document that identifies and explains the variances and reconciles the actual and budgeted profit figures. You should identify further information required that would help to further explain variances.

Task 3 The directors have the opportunity to invest in a new project. This involves the acquisition of new machinery. The figures for the project are shown in the table below.

Cost of machine Estimated life Estimated future cash flows: Year 1 Year 2

£10,000 5 years

£2,000 £3,000

Year 3 Year 4 Year 5 Estimated residual value

£3,000 £5,000 £5,000 £3,000

For the project, calculate the accounting rate of return and the payback period. In your report, explain the significance of these values and indicate how such values can be used to determine the viability of a project. The board think that they might like to raise money to enable them to invest in the project. Explain to the board how they might obtain finance for a business project. In addition discuss the components of…

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