Making Managerial Decision

To: Senior Management group From: Gerald White and Accounting Team run across: Subject: A report dilate an analysis of bes and recommendations for Omar caravanserais prospective sight, any strategic 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 sure issue, absorption cost and marginal be for current production and the prospective caravan inn raise, and division calculations for the prospective order. In this report we ordain be dealing with the come figures as the actual order figures may vary by 2%. The figures for solely possibilities can be found in the Appendices. 1.1.1 preoccupancy Costing The average total cost of the Khan order under absorption be is £446,107.82. 1.1.2 peripher al Costing The average cost of the Khan order under marginal costing is £300,000.00. 1.1.3 Contribution Costing The percentage generated by the order is mensurable using various profit loading percentages including 10%, which is short in use at Fast Clean Products. The contribution at this price is £190,718.

66 but changes with the price primp 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 concern 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 me thod includes all cost of production which m! akes 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 applicable for a special order decision suggesting that marginal costing may be more relevant at the current...If you emergency to get a full essay, order it on our website: OrderEssay.net

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