accounting system in companies

8/19/2019 Accounting System in Companies

http://slidepdf.com/reader/full/accounting-system-in-companies 1/4

6.1. Analyzing the relationship cost - quantities - proft

In management and business operations, is not the same as companies and

organizations

large-scale economic ocials, managers o small and medium enterprises oten

hae decision

in conditions o lac! o support proessional nature o fnancial inormation systems

basically accounting ma"or, intensie. #hereore, the simple analysis tools, easy

easy to use $ill e%ectiely help managers o small and medium enterprises in the

orientation and decision ma!ing or the daily operations o their business.

&ost Analysis - quantities - proft '&()* is a ery useul tool to help

or managers $ill be more a$are o the relationship bet$een costs, quantities and

profts.

&() analysis does not require administrators to hae ull detailed accounting

inormation, it sets

e+planations centered on profts a%ected by fe actors as ho$

1. di%erent selling prices.

. ales.

/. ariable costs per unit.

0. total f+ed costs.

. #he structure o the products are sold.

2ecause the &() analysis helps managers understand that the margins are

)roft $as a%ected by actors such as ho$ this mainly it is an important tool

in many !ey business decisions. #hese decisions may include hould

selling products and serices, to sell at a price much, use strategy

3hat mar!eting and apply the cost structure.

&() analysis based on behaioral changes o business e+penses or

changes in the olume o actiity 'production and sales*. ome e+pense items suchas

direct materials, direct labor transorms the production olume o products

or sales changes, ho$eer, hae a number o e+penditure items not change $hen

production olume o product sales or changes, such as depreciation e+pense



machinery and actory house, the money $ages o labor management.

According circulars /4556 4 ##-2#& o une 1, 556 the applicable 7uidelines

management accounting in the enterprise, the type o ariable costs or its f+ed

Industry is defned as ollo$s

(ariable costs, also !no$n as ariable 'or ariable costs* As the cost o production,

2usiness changes proportional to the total, the proportion o the ariation in the

olume o products,

including ra$ material costs, direct materials, direct labor costs and a number o

clauses

15

oerall production costs, such as labor cost, cost o utilities, repairs and spare parts

machine, ... ariable cost does not change $hen calculated or a unit o production,$or!.

8i+ed costs are costs called inariant 'haydinh charge* As the cost o that total

the number does not change $ith the ariation in the olume o products, $or!,

including e+penses or

amortization, employee $ages, managers, ... &ost inariants o a product unit,

$or! is related inersely related to olume, product, $or!.

In short, the ariation in olume o operations $ill directly impact the total

olume o ariable costs and profts o the business, $hile the f+ed costs

no change and no direct a%ect business results o the period.

6.. 9etermine the brea!een point in the business plan shall

2rea!een point is the point at $hich total reenues equal total costs, in other

$ords

is at the point o zero proft. In construction the business plan shall brea!een point

is

:inimum mold that business managers may be acceptable in considering $hether

to proceed

operating or not. 2rea!een is a simple tool but e%ectie ealuation plan shall,

it does not require management to use accounting detail and comple+ calculations

to question

e%ectie response to e+pectations o the business plan shall.

2rea!een point is determined based on the ollo$ing equation



#otal reenue - #otal ariable costs - f+ed costs #otal ; 5

2rea!een point can be determined according to the olume o product 'olume o

brea!een*

or by alue 'reenue brea!een*.

8or e+ample 6.1&ong <oa (ien &ompany manuactures and sells product = $ith

general inormation as ollo$s

)rice to sell 1 unit o = /5,555

#otal ariable costs 4 1 ) (>91?,55

#otal f+ed costs in the company@s 10 million contract period

As! ho$ much the company must sell the ne$ product in the brea!een periodB

Applying the equation aboe brea!een, called C is olume o products or sale to

Air

capital, $e hae equations as ollo$s

C+/5.555 - C+1?.55 - 10 555 555 ; 5

ole equations defne C ; 10,555 products

#hus, i the company $ants to brea!een :ember tates, they hae to sell at least

10,555 are

product units during the period. I the business plan shall :ember tates hae

predicted bloc!

olume consumer products under 10,555 units holding company $ould ma!e losses'reenue during the period

not enough to o%set e+penses*. I the orecast olume o products sold are greater

than 10,555 shares

position, the company $ill be proftable.

I the calculated alue, :ember tates $ill hae the company achiee brea!een

reenue leel in

05 million (>9 '10,555 + /5,555 e )*

In this graph roads total reenue and total cost o road "unction at the bloc!

) olume or 05 million (>9 10,555.

2esides brea!een methods to identiy and ma!e use o the equation in Dquation

on. :anagement can quic!ly calculate brea!een through application concept

contribution rate, also !no$n



the other is called the balance to ma!e charges 'according to circulars /4556 4 ##-

2#&, this concept is called the

EInterest on ariable costsE*.

&ontribution rate is the di%erence bet$een the sale price 'sales* and ariable costs.

#arget contribution rate

can be determined on the basis o units o product or on the basis o contribution

rates. contribution rate

can also be measure by absolute alue or a percentage 'o the selling price*.

7oing bac! to the e+ample o the company :embers tates, $e can determine the

contribution rates are indicators

)roduct = is as ollo$s

&ontribution rate on a product /5555-1?55 ; 15.55d 4 )

&ontribution rates 15,55 4 /5,555 ; /F

&ontribution rate is the share o reenue ater subtracting the ariable costs

thereore about the economic signifcance, its interest

#he main contribution is partly to o%set f+ed costs and generate profts. I the brea!

een point

$here proft is zero, then it can be inerred that the company $ill brea! een i

adequate contribution rates

to coer total f+ed costs.

In the e+ample o the company :embers tates, 1 unit contribution rate is 15.55dproduct, i total

10.555.555d f+ed costs, the company is to sell the total product to brea!een is

)agesize brea!een ; 10,555,555 4 15,55 ; 10,555 )

Gr can determine brea!een sales as ollo$s

9 brea!een ; 10 million 4 /F ; 05 million dong

#he concept o contribution rates $ill not only help business managers easily

determine the quantities

brea!een sales in a business plan shall, it also helps business managers

accounting system in companies

Documents