Luotang Power

Utilities – totaled $120,000.00 in year 7, and in years 7 to 8 increased +11.1% or $135,000.00. You would think this is strength if looking merely at the numbers, but in actuality it’s a negative because utilities used cost the company money. They shouldn’t have been used nearly as much because the overall usage of the manufacturing plant went down, and that makes this a firm weakness.

In this task I’m going to analyse the figures on cash flow that I created in P3 and justify why you think the business might have problems also provide range of solutions.

Standard prices allow us to set the expected value of the goods and from this we can then calculate variances such as price and quantity variances which allow us to do responsibility accounting.

6. MB4 Profit and Loss Account 2: A worked example of your solutions to your identified problems in P&L1

Price elasticity of demand refers to the difference in demand as related to price. According to Douglas (2012), “Price elasticity of demand is defined as the percentage change in quantity demanded divided by

(cost of goods manufactured in 2008/ sales value for units produced in 2008) * ending inventory 2008

If a person looks at the horizontal analysis it will give more information. There are two different ways to do a formula for this. The first would be using the current year and subtract from the base year. The second formula you would divide the current year amount from the base amount.

Raising cost of raw materials. Raw materials used by the company are petroleum derivatives and highly dependent on oil prices. Variance of oil prices affects negatively the company because it increases the costs affecting profitability and competitiveness.

Hence, the standard cost per ton for variable costs, as of the beginning of the year, was $650 per ton ($21,450/33).

1) Evaluate HTC’s performance as described in the case. What are its competitive assets and liabilities?

Based on the above description, forms of elasticity will affect business decisions and pricing strategies differently depending on the nature and type of products or services being offered. Business organizations whose product offerings have elastic and perfectly elastic price elasticities of demand should not attempt to raise prices of their products because it will cause the quantity demanded and consequently total revenues to drop drastically. Businesses can there use the price elasticities of demand to determine whether the proposed changes in their prices will raise or reduce their total revenue. The following expression may be useful in helping business organizations to determine the impacts of elasticities on their total revenues based on the suggested price changes.

In this case study I will be discussing following problem: Why has Butler Lumber been profitable in the increasing volume of sales but at the same time it is experiencing cash difficulties in 1988 – 1990? This is a historical problem and my calculations and assumptions are based on income statement and balance sheet for 1988 – 1990.

The change in prices also had an impact on the Italian region’s expected and actual profit because the €7 total sales variance represented an increase of €7 profit for the actual profit. The €7 variance was calculated by the favorable €20 variance for ice cream sales and an unfavorable variance of €13 for specialty sales (€20-€13=€7). This proves that the Italian region can charge slightly more for their ice cream sales given the increase in demand, while the increase in demand of the specialty product could be more attributed to the decrease in price. Overall, the change in pricing came out to make a positive impact on the Italian region’s profit.

Elasticity of demand helps the sales manager in fixing the price of his product, deciding the sales, pricing policies and optimal price for their products. The evaluation of this measure is a useful tool for firms in making decisions about pricing and production which will determine the total

Next one is the perception errors of Janet, the client manager and human resource director. The third problem is George was forced in the stress situation. Another issue is George’s dissatisfaction about job and work behaviors which caused to the exit-voice-loyalty-neglect actions. The fifth is teamwork environment, processes and the last problem is ABC consulting failed to implement the motivation procedures in motivating its staffs.