Task 5: Support for Decision Making Discuss how YourVent will require and use basic costing information to assist with decision making. Give Illustrative examples relevant to YourVent and its goals as you have previously described.
The assignment comprises 6 (SIX) tasks. You must respond to all tasks.
Task 1: Overview
Identify and describe your chosen organisation (YourOrg) in one paragraph of no more than 100 words. Then summarise the new venture you have conceived (YourVent) in a second paragraph of no more than 100 words. The latter should briefly explain the type of organisation, its aims, products, services, and operations.
NOTE: these two paragraphs will not receive any marks and do not count against the word quota for the assignment.
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Task 2: Understand How Business Organisations are Financed
Use the financial information for YourOrg to analyse how long-term and short-term finance has been used and invested within the organisation. Critically evaluate how finance has been managed to attain the goals of the organisation.
Task 3: Assessing Financial Performance
Critically evaluate, in summary form, the performance of YourOrg over the last five years in financial and non-financial terms.
You should include, in the appendices, analysis of the performance of YourOrg from the published ratios for the last five years, within the notes to the published accounts of YourOrg. And, using the organisation’s balanced scorecard or similar published data within the annual reports, assess the success or otherwise of the organisation in addressing the needs of customers, employees, the environment and ethical concerns.
Task 4: Performance of YourVent
It has been decided that YourVent should have an initial funding of $100,000. The person proposing setting up the organisation is wealthy and could provide the capital and/or guarantee any loans to be obtained. And others interested in YourVent also have substantial funds available.
Summarise the goals of YourVent and decide what type of organisation it should be (e..g. sole trader, partnership, charity, etc) and what its capital structure should be.
Briefly explain the financial transactions that YourVent will need to undertake in its first month of operations and decide how its performance should be measured in financial and non-financial terms, setting out the basic principles you regard as Indicators of its success. Make reference to the financial statements and notes you Include in the appendices as detailed in the following paragraph.
In the appendices, forecast how you imagine its income statement and statement of financial position should look and include notes describing TWO (2) accounting policies and principles that it would be appropriate to follow, using this to help illustrate your explanation in the paragraph above.
Task 5: Support for Decision Making
Discuss how YourVent will require and use basic costing information to assist with decision making. Give Illustrative examples relevant to YourVent and its goals as you have previously described.
Explain the financial information that YourVent would need to provide to external users of financial accounts as compared with YourOrg.
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Task 6: Management Accounting for Business Decisions
Assess the potential uses of TWO of the following techniques to YourVent and illustrate how the two you have selected, which should be different from techniques addressed In answering Task 5, could be used to assist in decisions within the organisation:
- Absorption costing
- Marginal costing
- Activity Based costing
- Break-even analysis
- Budgeting
- Capital Investment appraisal
Explain both of the two techniques and evaluate the usefulness or otherwise of each and provide reasoned recommendations for the adoption of one of the techniques. Illustrate, with an example, how the technique recommended could be employed in an organisation of the type and size of YourVent to meet its goals.
