Task 1 must be presented in a report format (2000 words). In the report you are required to: a) Indicate the importance of management accounting in managing your organisation. b) Evaluate the main cost structures of your organisation c) Determine the price and break even sales needed for your product for a successful business, by using appropriate methods. You must use the information provided in the business case for creating own business plan. Give a detailed introduction of the business you intend to start to convince the bank manager about its feasibility. While analysing the cost requirements the group need to: • Identify and classify different elements of cost to be included in a statement of cost. • Establish the requirement of fixed and variable cost of a business with sufficient examples. • Provide an explanation regarding which method of pricing you used to arrive at the target selling price and the underlying assumptions to support your figures for break- even point. • Outline the implication of bank loan as a source of capital for the business. (Max 1000 words • Explain the need of forecasting correctly the revenues, expenses and cash incomings and out goings with the help of budgets. Incorporate the seasonal nature of the demand for your product into those budgets. (Max 400 words) • Big business decisions are made on the basis of estimated figures. Comment on the possibility of making a good business out of your current product. Your assumptions need be supported by the figures estimated. ( Max 250 words) Outline the importance of management accounting in managing your organisation and establish how management accounting is different from financial accounting( Max 350 words)
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