п»їBig Reddish Bicycles Pty Ltd
Based on the company's strategic plans, the company aims to acquire a net income before duty of $1, 000, 1000. 00. Depending on the master budget for the company, there are a number of things wrong with the way the budget is set to the quarterly budgets, All the figures are identical, this should not be like this, as the quarterly financial constraints fluctuate, likewise according to the information given available Quarter 2# has 30% more revenue than the various other quarters. You can easily recognize with a few changes, which the company is capable of their net profit target of $1, 000, 000. 00 prior to tax.
Here are some options pertaining to the company to consider to achieve their $1million net profit ahead of tax are as followed: -
Option 1: Product sales for the quarters (1, 3, and 4) are less 30% if they are put against quarter (2). That means the fact that volume of the master cover Quarter (2) is going to boost 30% more than the other quarters and the commissions will increase 30% more than the other quarters too. Option 2: Decrease the cost of goods offered and price by twenty percent due to the current economic climate, this process, the company could get more earnings by creating more amount for the sales and at the same time the company can easily deal with different suppliers to deliver parts for their products to lower the cost of producing their products. Likewise the company can have a promotion pertaining to special prices and discounts to keep clients happy and or the company's clientele are held happy as well. Option several: Staff Commissions are standing up at 2 . 5%, The organization needs to make a deal with the personnel to drop the commissions by a further 0. 5% to get to a 2% commission charge in order to decrease the cost to the company, this will likely start to reduce costs and duty so that the business can start to accomplish its target of $1, 000, 500. 00 ahead of tax. In the event that this option can be taken or considered, cut backs about staff must take impact if the personnel are not willing to discuss their commissions and or salary/wages....