Incident Command System Essay Example

TABLE OF CONTENT.

STAKEHOLDERS……………………………………………………………….………………3.

ETHICAL ISSUES ARISING……………………………………………………………………4.

REMEDIES TO JILL’S SITUATION. ………………………………………………………..…4.

BUDGETED INCOME STATEMENT. …………………………….…………………………..5.

CASH BUDGET. …………………………………………………………………………..……7.

FIRM’S ABILITY TO REPAY THE LOAN. ……………………………………..……………8.

REFERENCE ……………………………………………..………………………………..……9.

STAKEHOLDERS

Stakeholders are parties or people who have interest on company affair for example how their funds are invested in a firm (shareholders) and if the ultimate goal of the organisation is achieved as per the set plan and also those that any company decisions affect them either indirectly or directly (employees and community). Therefore in Jill’s situation the stake holders are;

  1. The bank- the bank is interested in the affairs of Jill’s business because they should know on how the loan should be used and also carries out cost-volume-profit analysis by determination of cost, profit and volume variables. This will assist the bank to know whether the venture is viable and have ability to repay the loan with interest. Failure to take into account such factors can result to increase in loan defaulters.

  2. Laborers- They are work force of the firm. And their interest is to be assured of job security, fair pay, and proper working conditions and in the part to deliver according to the set memorandum between the employer and employee in their work contract agreement.

  3. Suppliers- This are people who are responsible for the supply of raw materials to the business. Their interest comes in the company due to need to know if they will get paid for the supply of material in time and with fair prices.

  4. Customer- he is the most important stakeholder in a business since without him/her the business would not exist. Customers have the right to be given quality service at an affordable price, if this is not taken into account, customer will not buy the products and the firm sales volume will reduce leading to decrease in profit which will result to increase in fixed cost per unit.

  5. Community- Since those who are working in Jill’s are part of the community, any negative impact that will affect the employees will directly affect the community. Take for instance if the employee loses job, he will be unable to afford some of the basic requirement such as education to his children or result to rise in crime rate in the community due to unemployment.

  6. The owner (Jill)-Jill’s interest is for the profitability of the firm and also for is personal satisfaction since when the business succeed, it is obvious that the person attached to it will be viewed as a winner and to keep on working hard for the success the owner needs to be motivated so the interest between the profit and success go hand in hand, with out one factor the other factor makes no sense.

ETHICAL ISSUES ARISING

Yes, there is an ethical issues in Jill’s situation since she is bringing in a new equipment which is not supported by CVP and the same time impacting on the employment level since their will be reduction of the direct cost on labor. Also Jill might have altered the CVP variables to arrive at the position in which she can borrow loan because she has not disclosed fixed manufacturing cost which is essential in calculation of the break even point (point where there is no loss or profit).

REMEDIES TO JILL’S SITUATION.

If I was on Jill position I could retain the hand-crafted way of making chairs but identify and eliminate process that they don’t add value to the product therefore, reducing processing cost and also find way of reducing waste of raw material or Find another venture in which I can recycle the waste to give it utility or sell to company which uses it has raw material. Thus maintaining increasing business profitability and also not affecting the employees and suppliers.

She should also study his competitor on his or her channels of distribution, suppliers and the technology he or she uses. It might help.

BUDGETED INCOME STATEMENT.

DEEP DIVE ADVENTURES

BUDGETED INCOME STATEMENT.

FOR THE MONTH ENDED MAY.

Sales (w1) 182,360

Cost of sales _

ross profit 182,360Financial ManagementG

Less: expenses

Salaries (w2) (36,000)

Fixed expenses (42,000) (78,000)

Net profit 104,360

DEEP DIVE ADVENTURES

BUDGETED INCOME STATEMENT.

FOR THE MONTH ENDED JUNE.

Sales (w1) 226,800

Cost of sales _

Gross profit 226,800

Less: expenses

Salaries (w2) (36,000)

Fixed expenses (42,000) (78,000)

Net profit 148,800

DEEP DIVE ADVENTURES

BUDGETED INCOME STATEMENT.

FOR THE MONTH ENDED JULY.

Sales (w1) 208,240

Cost of sales _

Gross profit 208,240

Less: expenses

Salaries (w2) (36,000)

Fixed expenses (42,000) (78,000)

Net profit 130,240

WORKINGS.

Not attended

attended

Total sales

31×2×20= 1240

1240×0.7=868

868×0.05=43

43×$20 =$860

868×0.95=825

825×$220 =$181,500

$181,500+$860 =$182360

31×2×20= 1200

1240×0.9=1080

1080×0.05=54

54×$20 =$1080

1080×0.95= 1026

1026×$220 =$225,720

225,720+1080

=$226,800

31×2×20= 1240

1240×0.8= 992

992×0.05= 50

50×$20 = $1000

992×0.95= 942

942×$220 = $207,240

207,240+1000=

SALARY W2

MAY: Salary = amount × no of employees

12000×3= $36,000 (same applies for June and July)

CASH BUDGET.

DEEP DIVE ADVENTURES

CASH BUDGET.

Receipt.

Sales: Booking fee.w1

Entry fee.(w2)

Total receipt

Payments

Expenses (W 3)

Drawings

Total payments

Net cash flow

Opening balance

Closing balance.

Notes: Depreciation is not added as part of fixed expenses in cash budget because it does not affect the cash flow since in real sense it is not incurred or there is no cash outflow but is only a provision created so that when the present equipment get worn out enough pool could have been accumulated to acquire a new one.

WORKINGS: Booking fee W1

May (868 peoples)

June(1080 peoples)

July (992 peoples)

0.2×992×20=$3968

0.3×1080×20=$6,480

0.3×992×20=$5,952

0.5×868×20=$8,680

0.2×992×20=$10,800

0.5×992×20=$9,920

ENTRY FEE W 2

MAY: 825× 200 = $181,500

JUNE: 1026 × 200= $225,720

JULY: 942 × 200= $207,240

FIXED EXPENSES W 3.

MAY: Total expense – Depreciation expense = budgeted expense cash outflow

That is,42,000 – 3000 = $39,000

Expense charged for the month= 60% × 39,000 = $23,400

JUNE: Total expense – Depreciation expense = budgeted expense cash outflow

That is,42,000 – 3,000= $39,000.

Expense charged for the month= ( 60% × 39,000 ) + ( 40% × 39,000 ) = $39,000. ( 40% is the accrued balance brought forward from the month of may).

JULY: Total expense – Depreciation expense = budgeted expense cash outflow

That is,42,000 – 3,000= $39,000.

Expense charged for the month= ( 60% × 39,000 ) + ( 40% × 39,000 ) = $39,000.

FIRM’S ABILITY TO REPAY THE LOAN.

The owner should not reduce his drawing since the closing cash will be enough to repay the loan and remain with surplus. (350,260 — 200,000 = $150,260). Also the total firm accumulated profit exceeds the amount needed to repay the loan. That is, 104,360 + 148,800 + 130,240 = $382,400.

Through above evidence it is evident that the firm will be able to pay the loan since the business is viable furthermore, it will remain with capital to expand the business or use to run day to day transaction of the business.

REFERENCE:

Maher, Lanen and Rahan, Fundamentals of Cost Accounting, 1st Edition (McGraw-Hill 2005).

Kaplan, Robert S. and Bruns, W. Accounting and Management: A Field Study Perspective (Harvard Business School Press, 1987)