No word then 200 words for each question
Deadline 2 hours
question 1
What are variances and why do these occur? When should one investigate budget variances? What factors would you consider when deciding whether to investigate a variance? As a manager, how you would you handle variances?
question 2
Thank you for sharing the budget you use with the company you work for. I caught my interest when you mentioned “event planning”. I would assume that some months or weekends may be more busy than other causing the budget to fluctuate. For events, I would believe that there is an estimated amount for the project and with that project one needs to stay within budget.
How are your estimations based?
It appears that the company considers all fixed costs, variable costs, and other expenses before determining the cost of the service. What percentage of the revenue is kept as income?
question 3
Another key consideration could be seasonality. Demand is not always straight-line, it could also have periods of highs and lows. In some cases, if you don’t have cash available, you either lose a sale or might not be able to pay your employees. The business needs to be able to provide change on-demand. The more cash you have the more that can be stolen in a robbery, although there are several ways to keep the money safe. What else should be considered? Do you consider demand?
When you add the wrinkle to the equation, by having a credit line, how do you ensure your collections are timely enough so that you have funds for the cash disbursements that you will need?
question 4
Having worked at Delta Airlines and Holiday Inn, I can speak from experience that both the Hotel and Airline industry use the breakeven/CVP analysis as a key way to ensure that they have full hotels and full planes. This will vary based on the time of the year, maybe even the day of the week. The biggest concern is making sure you are maximizing your revenue. When using a CVP analysis, the hardest thing to estimate is your demand. Once you have a good handle on your demand, you can make better decisions. How would you determine how many seats/rooms to send to the wholesale market?
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