Part A Question 01 A company can study the relationships between cost, volume and profit using Cost - Volume – Profit analysis. It is need to bare a cost for any kind of production that comprises variable, Fixed and mixed cost. In the Cost-Volume-Profit analysis all the costs are separate as Fixed and Variable costs. Variable costs are directly proportional to the production volume (Number of units). Direct material cost and direct labor cost are examples for variable cost.
The forecasted cash outflow and inflow for every period must be recognized and additionally the expected discount rate in order to compute NPV. In spite of the fact that the correct value can be identified after project completion but reasonable appraisals can be made by taking a gander at the execution of comparable projects. NPV formula as below where Ct is net cash inflow, Co is total investment, r is discount rate and t is no. of years. The NPV technique empowers companies to change in accordance with the difficulties of working with constrained financial resources.
Also, various methods of controlling costs such as standard costing system and flexible budgets have close relation with the variable costing system, in turn making it easy to use those methods. 3. Companies using variable costing system are able to prepare income statement in contribution margin format that provides necessary information for cost volume profit (CVP) analysis. On the flip side, this data cannot be directly obtained from a traditional income statement prepared under absorption costing
Besides, in managerial decision-making; the contribution is used as a tool. It is more trustworthy in decision making. In stock valuation of some proportion of current years fixed overhead, the illogical carry forward can be prevented. Marginal costing also shows more obviously the effect on profit of variations in the capacity of sales. It expenses off large amount of balances left in overhead control accounts which represents the trouble of determining precise overhead recovery rate.
The effect of the financial depression on the hotel sector has been highlighted by results from a world's leading operators the late crisis have in reality invigorated a profound enthusiasm for the investigation of the related reasons, outcomes, and conceivable cures for such scenes. In perspective of these occasions, Hotels around the globe are battling for clients over the worldwide economic depression in connection to this spending on Tourism and Hotel is firmly identified with the financial cycle. Moreover, clearly spending on leisure exercises, for example, occasions and outings has a tendency to be one of the important things that customers cut back in times of financial hardship. It is noted that recently the chains were generally hopeful about prospects, trusting the impact of credit's crunch had largely been restricted to the budgetary segment. On the other hand, in recent past interest for lodging settlement was hit and this is liable to begin to appear through to their profitability.
et al. 2009). The hotel industry has been playing an important role as they are in so much of demand. As time when by, many new competition has come up and started growing bigger and bigger till today. And now we currently have way too many hotels in the world providing all the guest needs.
In an addition, hotels everywhere indicates that their community is overbuilt and cause there are too many available hospitality rooms to rent to the customer. In the result of competition, which often involves price cutting in effort to provide greater value to customers, educes still further the profits generated. Besides that, the globalization have impact the technology in the hospitality industry. The challenges of keeping up with the fast pace of technology is difficult and expensive (Wang, 2009). For example, the interactive reservation system enable the customers make reservation of room through online.
The world is changing every day. More and more new ideas and innovations come out. The hospitality and tourism industry is facing different challenges and opportunities. Trends in the industry can be just a flash in the pan but some can last for a long time. The following analyzes three emerging global trends that are likely to impact the growth of the industry in the future.
2. 2 PROJECT COST MANAGEMENT Cost performance on a construction project remains one of the main measures of the success of a construction project (Atkinson, 1999; Chan and Chan, 2004). Several reasons are vital for consistent cost estimating for example – budgeting purposes, loan applications if necessary, for estimating commercial feasibility or viability of the project. Cost management could be defined (include, consist of) as process of planning, interpretation, detailing, directing, agreement, cost control and evaluation of the construction during its preparation and constructing phases. This process is going on from throughout the building planning, projection and design, construction phases of a project until the final account is
2007 a) through the introduction, the importance of labour migration to the workforce of the contemporary hospitality industry is well documented (Shaw and Barrett-Power, 1998; D’Netto and Sohal, 1999; Williams, 2005; Baum, 2006). Especially for the migrant workers, discrimination, abuse and harassment by migrant workers (Tom, Eli, Shamim, Jithendran, Frances, and Niamh, 2007 a) are the main problems that the hospitality businesses have long relied on a culturally diverse workforce (Christensen-Hughes, 1992). A sudden influx of foreign workers, brought various of cultures to the company, if the company dose not prepare well in advance of managing the cultural differences, slightly will cause the communication problem between high and low positions employee (Kathleen, 2000), severely, it will affect the revenue directly to your