Competition Bikes Budgeting and Variance Analysis Report Western Governor’s University Competition Bikes Budgeting and Variance Analysis Report Competition Bikes, Incorporated (Inc.) makes bicycles for professional and other highly accomplished riders who compete in bike races, biathlons, and triathlons. Approximately sixty percent of all race winners have been victorious using bicycles designed by Competitions Bikes, Inc. This extraordinary success rate is a topic of conversation among racers and has led to exponential success for founder Larry Ferguson who formed the company in 2001 in his garage. Competition Bikes is known for quality products and is leader in the market with the CarbonLite
2. What would be a first-level breakdown of the total variance described above in (1)? 3. How can the total flexible-budget variance be broken down (i.e., what are the constituent parts of this total variance)?
Custom Snowboards can minimize risk by continuing to grow sales and reinvesting into the company. Expansion to Europe is one way. Another is to invest money into research and development, and marketing. No increase in research and development happened in the past three years and could prove beneficial to the company. Website create and maintenance can also be used to mitigate risks. A well working website can bring in more sales and possible reduce the compensation budget as employees leave through natural attrition.
Question: (TCO 4) When would it make sense to use a flexible budget as compared to a forecast budget?
An aging of a company's accounts receivable indicates that $4,500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record bad debts for the period will require a
1. A NSF check should appear in which section of the bank reconciliation? (Points : 2) Addition to the balance per books. Deduction from the balance per bank. Addition to the balance per bank. Deduction from the balance per books. | 2. A consequence of separation of duties is that
With slow sales, the company had to keep some expenses flat, such as administrative salaries, web creation / maintenance and executive compensations. This is a weakness and as stated before, the company will need to increase sales to increase profits to raise its strength. On the balance sheet for years 7 and 8, the current assets increased in accounts receivables. This is probably due to slow pay and/or unpaid accounts receivables. The change between years 7 and 8 reported -15% with a decrease change of $107,640. Total assets change was -0.2% and this position reflects a financial weakness for the company. Cash and cash equivalents can be used to satisfy during this period, although there was a change of 348.2%, this increase could have been used for operating expenses. This is too much cash sitting idle and not working for the company. Competition Bikes can assess where to put this cash to work for the company.
Custom Snowboards Inc. Managing Capital & Financial Assets 05/10/2014 WGU JET2 Financial Analysis Task 5, Part II - PASSED To: Chief Executive Officer (CEO) of Custom Snowboards Inc. Subject: Report of historical data and recommendation on how to proceed with expansion plans to Europe. European Expansion Historical Analysis To make a decision about expansion
Sprint has been affected by a number of factors over the past few years, and continues to be vulnerable to many financial threats. When evaluating the company’s vulnerability to current financial
Afterwards, the firm’s revenue began to increase steadily, peaking in the fourth quarter in 1988 at $25,131,000.00. However, when going from the last quarter in 1988 to the first quarter in 2000 we can see a 23% decrease in revenue ending at $19,348.00 which is more than likely a sign that the peak could have been due to a high point in the year from holiday shopping, for example. The company’s Account Receivables, like it’s gross margins, are at it’s lowest in the first quarter of each year. In 1997 in the first quarter the company’s Account Receivables were at $30,857,000.00 which indicates a significant decrease in sales. It was not surprising to see that the point of the company’s highest Account Receivables was in the fourth quarter of 1999 at $37,324,000.00. Due to the fact that the Accounts Receivables were rising and declining linearly in comparison to sales, we can assume that clients were paying off invoices appropriately and that the difference was mainly influenced by the increase or decrease in company sales. IBM’s gross margins were at it’s lowest in the first fiscal quarter of1988 at $6,450,000.00 before increasing to 34% to $9,809,000.00 by the fourth quarter of the same year. The constant slight shifting of gross margins per quarter indicates stability and a positive outlook for the company.
Use of the flexible budget shows the budgeted operating income given the actual sales. When you compare the flexible budget to the actual budget you are able to compare the total sales and cost incurred given the same units sold. The sales price variance, which is the actual sales less the flexible budgeted sales, was $14,700 favorable. This means that actual sales were higher than budgeted sales at that usage. This is attributable to the increase in service price from $25 to $26.40. Price variance for material usage was $2,100 over the flexible budget projection. This could be attributed to overuse or waste of materials. As expected, the direct labor price variance was $3,375 lower than the flexible budget amount. This is attributed to the manager’s effective use of labor. Operating expenses were also higher than the flexible budget
Financial Analysis Task 4 A1. Costing Method In order for a company to succeed and be successful, it is very important for the company to understand the difference between profit and cost of goods. There are costing tools that can help a business figure out what the cost of product is during the manufacturing process. These tools are beneficial for a company to figure out how much profit can be made. These tools take the cost of manufacturing the unit and subtract it from the sale price of the product. Having this information, the profit per unit, is very beneficial for a company to know which products they should produce more heavily, or which ones to eliminate. I want to discuss two costing methods that are beneficial to a
BUSS 2 Key Term Definitions ©T Ockenden Finance: Budget – A budget is regarded as a goal or a “yardstick”; it’s something a business uses in order to work to, for example: a firm may have budgeted fixed costs of £5000, they aim to either meet this budget or fall below it to
• According to the balance sheet Laura & Bob increased accounts receivable by 100,600 by the end of year three. Now this increase could indicate that the company may be short in collecting, and might be struggling to find the cash to pay the bills. So, it would be important for
2.1 Financial Statement At the end of quarter 2 the Gross Profit of the company was $ 1,031,772 with the operating profit $ 118,983. The company strived to achieve the operating profit in positive numbers however it was taken into consideration that the operating profit might result in negative numbers during the initial stage. However,