Managing Financial Resources Research Paper Example | Topics and Well Written Essays - 1750 words

Managing Financial Resources - Research Paper ExampleThe administration, design, and performance budgets should be reviewed so that problems with those could be uncovered and favorable changes could be made. Prices of inputs used for the output process could have increased. New machinery could have been bought for crossingion or design.Sales declined by 15 percent. Normally the Direct costs also should have gone good deal proportionately. Ideally the direct costs should have come down from 110 million to about 96 million. This indicates that direct costs are not truly apportioned among the products. A review of the costing manner is required to identify any problems with it. Similarly, when sales have gone down by 15 percent, gain profit came down by 27 percent. If profit margin was the same on all products, the rough-cut profit would have come down to a similar extent. This means that a larger piece of sales were of products that are priced so that the profit margin is low o n their sale. Some products might pull down be prices at a level that causes a loss. The above observation, when seen in concert with the increase in production overheads confirms the view that the costing of products is not done in a naturalistic manner. The deployment of more than resources in production expirationed in increased production overheads, but it did not result in increased sales. ... The above observation, when seen together with the increase in production overheads confirms the view that the costing of products is not done in a realistic manner. The deployment of more resources in production resulted in increased production overheads, but it did not result in increased sales. Increases in the all-day suckereting budget also did not increase sales, which could be a result of poor advertising practices.II. Pricing PoliciesSlingshot follows cost plus determine. This method adopts an average cost for products and the interchange price is arrived by adding a percent age mark up (In this case 15 %). This method overlooks the point that the basic costs of some products are more than those of other products. In fact, the selling price is not directly related to the value addition done in specific products. A more trusty method for pricing is Absorption Cost Pricing. In this method, direct and indirect cost of each product is scientifically determined and allocated. Each product sold by a company is given a share of the companys direct and indirect costs and given a separate total cost. A mark up is applied to the actual cost as determined for each product. Cost plus pricing and Absorption cost pricing both do not take into account any mart factors such as demand and availability. This may not be necessary for this kind of business where food market demands remain steady. However. a massive increase in the amount of resources devoted marketing did not come along to bring any results. This might be a result of limited demand elasticity. It could also be a result of bad marketing. Consumer surveys should be done to analyze consumer demand so that marketing is more effective. The market for Slingshots products and any companies that compete with